Every firm in the perfectly competitive gumball industry has the following long-run total cost function: TC = 0.2q³ – 4q² + 30q, where q is the output of each firm. The market demand for gumballs is of the form Qp = 100 – P, where Qp is the total amount demanded, and P is the market price. Firms are free to enter and exit the gumball industry in the long run. Each firm has the same U- shaped long-run Average Total Cost curve. A. Find the equation for the long-run average total cost and the long-run marginal cost. B. Find the long-run equilibrium level of output of each firm in the gumball industry. C. Find the long-run equilibrium price and the long-run equilibrium industry output level.

Every firm in the perfectly competitive gumball industry has the following long-run total cost function: TC = 0.2q³ – 4q² + 30q, where q is the output of each firm. The market demand for gumballs is of the form Qp = 100 – P, where Qp is the total amount demanded, and P is the market price. Firms are free to enter and exit the gumball industry in the long run. Each firm has the same U- shaped long-run Average Total Cost curve. A. Find the equation for the long-run average total cost and the long-run marginal cost. B. Find the long-run equilibrium level of output of each firm in the gumball industry. C. Find the long-run equilibrium price and the long-run equilibrium industry output level.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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