4. Consider two markets for the same good: markets 1 and 2. The demand for the good on these markets are: P₁ = 20 2Q₁ and p2=40-2Q2 The total cost of producing any output Q is c(Q) = 10 + 8Q where Q = 9₁ +92. (a) Suppose these two markets are completely separated but each is served by a per- fectly competitive industry. What will be the prices and outputs supplied to cach of the two markets?

4. Consider two markets for the same good: markets 1 and 2. The demand for the good on these markets are: P₁ = 20 2Q₁ and p2=40-2Q2 The total cost of producing any output Q is c(Q) = 10 + 8Q where Q = 9₁ +92. (a) Suppose these two markets are completely separated but each is served by a per- fectly competitive industry. What will be the prices and outputs supplied to cach of the two markets?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3. Suppose that each firm in a competitive industry has the following costs: Total Cost: TC = 50+ ¹/29² Marginal Cost: MC = q where q is an individual firm's quantity produced. The market demand curve for this product is Demand: QD = 120 - P where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market. a) What is each firm's What is the equilibrium price and quantity for th In this equilibrium, how much does each firm produce? Calculate each firm's profit or loss. Do firms have an incentive to enter or exit? g) In the long run with free entry and exit, what is the equilibrium price and quantity in this market? h) In this long-run equilibrium, how much does each firm produce? How many firms are in the market? e) f)
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1.- A company that works in a perfectly competitive market has a total cost function: TC = Q3 - 36Q2 + 540Q + 600 The supply and demand functions in that market are: QS = 5P -500 Qd = 4,000 -10P b) Find what benefit you will get d) Represent graphically the market equilibrium and that of the company, including the closing point e) Locate the rectangle that represents profits on the company's equilibrium graph. Calculate your área considering the values taken by the base and the height. Validate that it reaches the same result (or very close) to the one obtained in part b).
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Generally, when preferences for a good rise, demand for the good rises. If a perfectly competitive market starts in long-run in the industry and equilibrium, holding all else constant, this will result in a higher market price, which will lead to the market. This causes price to None of these 3 possible answers listed here are correct. economic losses; attracts new firms into; fall economic losses; causes some firms to leave; rise further O positive economic profits; causes some firms to leave; rise further