A perfectly competitive market has 1,000 firms. In the very short run, each of the firms has a fixed supply of 100 units. The market demand is given by Q = 160,000 10,000P. Calculate the equilibrium price in the very short run. b. Calculate the demand schedule facing any one firm in this industry. c. Calculate what the equilibrium price would be if one of the sellers decided to sell nothing or if one seller decided to sell 200 units. d. At the original equilibrium point, calculate the elasticity of the industry demand curve and the elasticity of the demand curve facing any one seller. Suppose now that, in the short run, each firm has a supply curve that shows the quantity the firm will supply (q) as a function of market price. The specific form of this supply curve is given by 9,=-200+50P. Using this short-run supply response, supply revised answers to (a)-(d). 11

A perfectly competitive market has 1,000 firms. In the very short run, each of the firms has a fixed supply of 100 units. The market demand is given by Q = 160,000 10,000P. Calculate the equilibrium price in the very short run. b. Calculate the demand schedule facing any one firm in this industry. c. Calculate what the equilibrium price would be if one of the sellers decided to sell nothing or if one seller decided to sell 200 units. d. At the original equilibrium point, calculate the elasticity of the industry demand curve and the elasticity of the demand curve facing any one seller. Suppose now that, in the short run, each firm has a supply curve that shows the quantity the firm will supply (q) as a function of market price. The specific form of this supply curve is given by 9,=-200+50P. Using this short-run supply response, supply revised answers to (a)-(d). 11

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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