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Assume that Vartoli Saadettin decides to start up a peddler's trade. His bench is in a perfectly competitive market and has the following long-run total cost function: LRTC(q) = 80q – 8q² + q³ Vartoli Saadettin also observes that market demand is given by: Q=12500-50P. Note that Q represents the market quantity, inc luding all the other firms in the market. a) Derive the marginal cost and average cost functions for Vartoli Saadetin. b) Calculate the long-run equilibrium quantity to produce for Vartoli Saadetin. c) Calculate the long-run equilibrium price and the number of firms in the market.

Assume that Vartoli Saadettin decides to start up a peddler's trade. His bench is in a perfectly competitive market and has the following long-run total cost function: LRTC(q) = 80q – 8q² + q³ Vartoli Saadettin also observes that market demand is given by: Q=12500-50P. Note that Q represents the market quantity, inc luding all the other firms in the market. a) Derive the marginal cost and average cost functions for Vartoli Saadetin. b) Calculate the long-run equilibrium quantity to produce for Vartoli Saadetin. c) Calculate the long-run equilibrium price and the number of firms in the market.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter11: Price And Output Determination: Monopoly And Dominant Firms
Section: Chapter Questions
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Assume that Vartoli Saadettin decides to start up a peddler's trade. His bench is in a perfectly competitive market and has the following long-run total cost function: LRTC(q) = 80q – 8q² + q³ Vartoli Saadettin also observes that market demand is given by: Q=12500-50P. Note that Q represents the market quantity, inc lud ing all the other firms in the market. a) Derive the marginal cost and average cost functions for Vartoli Saadetin. b) Calculate the long-run equilibrium quantity to produce for Vartoli Saadetin. c) Calculate the long-run equilibrium price and the number of firms in the market.
Transcribed Image Text:Assume that Vartoli Saadettin decides to start up a peddler's trade. His bench is in a perfectly competitive market and has the following long-run total cost function: LRTC(q) = 80q – 8q² + q³ Vartoli Saadettin also observes that market demand is given by: Q=12500-50P. Note that Q represents the market quantity, inc lud ing all the other firms in the market. a) Derive the marginal cost and average cost functions for Vartoli Saadetin. b) Calculate the long-run equilibrium quantity to produce for Vartoli Saadetin. c) Calculate the long-run equilibrium price and the number of firms in the market.
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