4. Suppose that each firm in a competitive industry has thefollowing costs:Total cost: TC = 500 + 0.5qMarginal cost: MC = qWhere q is an individual firm's quantity produced. The marketdemand curve for this product isDemand: Q" = 120 – PWhere 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 fixed cost? What is its variable cost?Give the equation for average total cost.(b) Graph average-total-cost curve and the marginal-cost curvefor q from 5 to 15. At what quantity is average-total-cost curveat its minimum? What is marginal cost and average total cost atthat quantity?(c) Give the equation for each firm's supply curve.(d) Give the equation for the market supply curve for the shortrun in which the number of firms is fixed.(e) What is the equilibrium price and quantity for this market inthe short run?(f) In this equilibrium, how much does each firm produce?Calculate each firm's profit or loss. Is there incentive for firmsto enter or exit?(g) In the long run with free entry and exit, what is theequilibrium price and quantity in this market?

Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

4. Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 500 + 0.5q Marginal cost: MC = q Where q is an individual firm's quantity produced. The market demand curve for this product is Demand: Q" = 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 fixed cost? What is its variable cost? Give the equation for average total cost.

4. Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 500 + 0.5q Marginal cost: MC = q Where q is an individual firm's quantity produced. The market demand curve for this product is Demand: Q" = 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 fixed cost? What is its variable cost? Give the equation for average total cost.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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