A market is at the perfectly competitive long run equilibrium, with market price equal to 2. All firms have the cost function TC(q)=5q−6q2+3q3 over the relevant range of output q. Suppose the market demand is 100 units at this price. How many firms are there in the market?

A market is at the perfectly competitive long run equilibrium, with market price equal to 2. All firms have the cost function TC(q)=5q−6q2+3q3 over the relevant range of output q. Suppose the market demand is 100 units at this price. How many firms are there in the market?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter25: Monopoly

Section: Chapter Questions

Problem 9E

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Question

A market is at the perfectly competitive long run equilibrium, with market price equal to 2. All firms have the cost function TC(q)=5q−6q2+3q3 over the relevant range of output q.

Suppose the market demand is 100 units at this price. How many firms are there in the market?

Definition Definition Structure of the market that exists when many buyers and sellers exchange similar commodities and prices are fixed by market forces, demand, and supply. When there is perfect competition, a single business cannot impact the price or market value of the homogenous product.

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