A firm sells its output in a PCM. The firm’s short-run cost function is given by SC = Q3/300 - 0.2Q2 + 4Q + 10 1. Derive the short-run supply function of a typical firm in this industry. 2. Assuming that there are 100 identical firms in this industry, derive the short-run market supply function. 3. If currently the market demand for these firm’s product is Q = 8,000 – 200P1⁄2 , determine the short- run equilibrium market price.
A firm sells its output in a PCM. The firm’s short-run cost function is given by SC = Q3/300 - 0.2Q2 + 4Q + 10 1. Derive the short-run supply function of a typical firm in this industry. 2. Assuming that there are 100 identical firms in this industry, derive the short-run market supply function. 3. If currently the market demand for these firm’s product is Q = 8,000 – 200P1⁄2 , determine the short- run equilibrium market price.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A firm sells its output in a PCM. The firm’s short-run cost function is given by SC = Q3/300 - 0.2Q2 + 4Q + 10
1. Derive the short-run supply function of a typical firm in this industry.
2. Assuming that there are 100 identical firms in this industry, derive the short-run
3. If currently the market demand for these firm’s product is Q = 8,000 – 200P1⁄2 , determine the short- run
4. At this equilibrium market price, calculate the level of output and profit that each firm produces in the short-run. With this information, comment on the potential entry/exit of firms in this industry in the long-run.
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