Consider the market for ice cream. Suppose that this market is perfectly competitive. The cost structure of the typical ice cream producer is as follows. Average total cost is equal to 50 1 ATC(Q) +;Q, average variable cost is equal to AVC(Q) = ;Q, and marginal cost is equal to %3D 2 MC(Q) = Q. %3D 40 1 Suppose that demand for ice cream cones is given by P' 3 × Qº. %3D 300 How many firms will operate in the market for ice cream in a long run equilibrium?
Consider the market for ice cream. Suppose that this market is perfectly competitive. The cost structure of the typical ice cream producer is as follows. Average total cost is equal to 50 1 ATC(Q) +;Q, average variable cost is equal to AVC(Q) = ;Q, and marginal cost is equal to %3D 2 MC(Q) = Q. %3D 40 1 Suppose that demand for ice cream cones is given by P' 3 × Qº. %3D 300 How many firms will operate in the market for ice cream in a long run equilibrium?
Chapter12: Firms In Perfectly Competitive Markets
Section: Chapter Questions
Problem 9P
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Question
![Consider the market for ice cream. Suppose that this market is perfectly competitive.
The cost structure of the typical ice cream producer is as follows. Average total cost is equal to
50
1
1
ATC(Q)
+÷Q, average variable cost is equal to AVC(Q)
Q, and marginal cost is equal to
2
2
MC(Q) = Q.
40
Suppose that demand for ice cream cones is given by PD =
x QD.
3
300
How many firms will operate in the market for ice cream in a long run equilibrium?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3f08d3cb-03f2-44ac-afec-90ed33ecc605%2Fb2ff6b16-8953-4da8-ab4a-b095bf8e46ae%2F7hf4iaw_processed.png&w=3840&q=75)
Transcribed Image Text:Consider the market for ice cream. Suppose that this market is perfectly competitive.
The cost structure of the typical ice cream producer is as follows. Average total cost is equal to
50
1
1
ATC(Q)
+÷Q, average variable cost is equal to AVC(Q)
Q, and marginal cost is equal to
2
2
MC(Q) = Q.
40
Suppose that demand for ice cream cones is given by PD =
x QD.
3
300
How many firms will operate in the market for ice cream in a long run equilibrium?
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