Consider the following setup for a perfectly competitive market: Suppose that for the firm, TC = 400+ Q², and MC =2Q. For the corresponding market, suppose 1 that demand is given by P=200- Q and supply is given by P=- 2 1 ==e. 2
Consider the following setup for a perfectly competitive market: Suppose that for the firm, TC = 400+ Q², and MC =2Q. For the corresponding market, suppose 1 that demand is given by P=200- Q and supply is given by P=- 2 1 ==e. 2
Chapter24: Perfect Competition
Section: Chapter Questions
Problem 7E
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![QUESTION 18
Consider the following setup for a perfectly competitive market: Suppose that for the firm, TC = 400+ Q², and MC=2Q. For the corresponding market, suppose
1
1
that demand is given by P=200- Q and supply is given by P=— ∙Q.
Given the firm's profits, is this situation sustainable in the long run? That is, will firms have an incentive to enter or leave the market?
Not sustainable, firms will enter the market.
Not sustainable, firms will leave the market.
Sustainable, firms will neither enter or leave the market.
Cannot be determined.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd64b97b9-2d95-43aa-8e0d-f1aad242cfeb%2F5a8f7be4-84b5-47a3-8a81-d21ca9b68323%2Fx8evzgm_processed.png&w=3840&q=75)
Transcribed Image Text:QUESTION 18
Consider the following setup for a perfectly competitive market: Suppose that for the firm, TC = 400+ Q², and MC=2Q. For the corresponding market, suppose
1
1
that demand is given by P=200- Q and supply is given by P=— ∙Q.
Given the firm's profits, is this situation sustainable in the long run? That is, will firms have an incentive to enter or leave the market?
Not sustainable, firms will enter the market.
Not sustainable, firms will leave the market.
Sustainable, firms will neither enter or leave the market.
Cannot be determined.
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