Assume the following short-run total cost function and its associated average total cost function corresponds to the minimum point on the long-run average total cost curve and this is a constant cost indsutry. TC = 5,000 + 4q + 0.0002q2 where TC is the firm's total cost in dollars and q is the quantity of output produced by the firm. Also assume the market demand is: Qd = 10,000,000 - 1,000,000P where Qd is the market quantity demanded and P is the commodity's price in dollars. a. What would the long-run equilibrium price equal? b. Assuming the firm and market are in long-run equilibrium, what quantity of output would the firm produce? c. Assuming all firms are identical, how many firms will there be in this market when it is in a long-run equilibrium?
Assume the following short-run total cost function and its associated
TC = 5,000 + 4q + 0.0002q2
where TC is the firm's total cost in dollars and q is the quantity of output produced by the firm.
Also assume the market
Qd = 10,000,000 - 1,000,000P
where Qd is the market quantity demanded and P is the commodity's
a. What would the long-run
b. Assuming the firm and market are in long-run
c. Assuming all firms are identical, how many firms will there be in this market when it is in a long-run equilibrium?
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