Assume the following equations describe the conditions for a typical firm in a monopolistically competitive market: P = 6 - .00075qd TC = 4,000 + 2q + .00025q2 where qd is the firm's quantity demanded, P is the commodity's price in dollars, TC is the firm's total cost in dollars and q is the quantity of output produced. Based upon these equations, answer the following questions: a. What quantity of output will the profit-maximizing firm produce in the market's long-run equilibrium? What price will the profit-maximizing firm establish in the long run? Explain how you know this firm is in long-run equilibrium? b. Determine the firm's allocatively efficient quantity of output? c. Determine deadweight loss that exists when this firm is in monopolisitc competition's long-run equilibrium.
Assume the following equations describe the conditions for a typical firm in a
P = 6 - .00075qd
TC = 4,000 + 2q + .00025q2
where qd is the firm's quantity demanded, P is the commodity's price in dollars, TC is the firm's total cost in dollars and q is the quantity of output produced. Based upon these equations, answer the following questions:
a. What quantity of output will the profit-maximizing firm produce in the market's long-run equilibrium? What price will the profit-maximizing firm establish in the long run? Explain how you know this firm is in long-run equilibrium?
b. Determine the firm's
c. Determine
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