Consider a perfectly competitive market where the demand for the good is given by Q=769-5p, where Q denotes the quantity demanded at price p. On the supply side, the good can be produced by identical firms with U-shaped average cost curves. The total cost of the industry as a function of total output, Q, is given by C(Q) = 5 Q What is the (long run) equilibrium price in this market?

Consider a perfectly competitive market where the demand for the good is given by Q=769-5p, where Q denotes the quantity demanded at price p. On the supply side, the good can be produced by identical firms with U-shaped average cost curves. The total cost of the industry as a function of total output, Q, is given by C(Q) = 5 Q What is the (long run) equilibrium price in this market?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.7P

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