67. In a perfectly competitive market, industry demand is given by Q = 1000 – 20P. The typical firm’s average cost is TC = 300 + Q2 /3, and marginal cost by MC = (2/3)Q. Suppose there are 10 identical firms in the market. What is the market supply? A. 30Q B. 40Q C. 15Q D. 5Q
67. In a perfectly competitive market, industry demand is given by Q = 1000 – 20P. The typical firm’s average cost is TC = 300 + Q2 /3, and marginal cost by MC = (2/3)Q. Suppose there are 10 identical firms in the market. What is the market supply? A. 30Q B. 40Q C. 15Q D. 5Q
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
67. In a
Suppose there are 10 identical firms in the market. What is the market supply?
A. 30Q
B. 40Q
C. 15Q
D. 5Q
![**Understanding Market Supply in a Perfectly Competitive Market**
In a perfectly competitive market, the industry's demand is represented by the equation:
\[ Q = 1000 - 20P \]
where \( Q \) is the quantity demanded and \( P \) is the price level.
The typical firm's average cost (AC) is given by the equation:
\[ TC = 300 + \frac{Q^2}{3} \]
where TC stands for total cost.
Additionally, the marginal cost (MC) for each firm is represented by:
\[ MC = \frac{2}{3}Q \]
*Question:*
Suppose there are 10 identical firms in the market. What is the market supply?
*Options:*
- 30Q
- 40Q
- 15Q
- 5Q
**Explanation:**
To determine the market supply, one must calculate the supply from a single firm and then multiply it by the number of firms (10 in this case) since they are identical. Consider the given marginal cost equation to identify the supply function and solve accordingly to find the correct market supply option.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff92474ca-1dcd-4fa8-8b54-74c0f0e67e11%2Fd893bb9e-5572-47dd-a867-983f23042c31%2Fdf6j0p_processed.png&w=3840&q=75)
Transcribed Image Text:**Understanding Market Supply in a Perfectly Competitive Market**
In a perfectly competitive market, the industry's demand is represented by the equation:
\[ Q = 1000 - 20P \]
where \( Q \) is the quantity demanded and \( P \) is the price level.
The typical firm's average cost (AC) is given by the equation:
\[ TC = 300 + \frac{Q^2}{3} \]
where TC stands for total cost.
Additionally, the marginal cost (MC) for each firm is represented by:
\[ MC = \frac{2}{3}Q \]
*Question:*
Suppose there are 10 identical firms in the market. What is the market supply?
*Options:*
- 30Q
- 40Q
- 15Q
- 5Q
**Explanation:**
To determine the market supply, one must calculate the supply from a single firm and then multiply it by the number of firms (10 in this case) since they are identical. Consider the given marginal cost equation to identify the supply function and solve accordingly to find the correct market supply option.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education