D,E,F **Long Run Equilibrium**Consider a perfectly competitive market with \( n \) identical firms. The cost functions of an individual firm are:\[TC = q^3 - 4q^2 + 74q \]\[MC = 3q^2 - 8q + 74\]The market demand is given by:\[P = 120 - Q\]#### Instructions:a) Graph two representations: one for the market and one for an individual firm to demonstrate the long-run equilibrium.b) Determine the output per firm in the long run, \( q = \ldots \), ensuring the firm operates at its minimum cost.c) Establish the long-run equilibrium price, \( P = \ldots \), with justification.d) Calculate the total market quantity purchased, \( Q = \ldots \), with reasoning.e) Assess the number of firms that can exist in equilibrium, \( n = \ldots \) firms.f) Explain why no additional market entry occurs.g) Clearly label all equilibrium values on your graph.Feel free to use this information to understand the conditions for long-run equilibrium in a perfectly competitive market and to visualize through graphs.

Total Cost function : TC = q3- 4q2 + 74q Market Demand : P = 120 - Q Long run equilibrium for a…

Long Run Equilibrium Consider a perfect competitive market with n identical firms. The cost functions of an individual firm are: The market demand is given by TC=q³ 4q² + 74q MC=3q²-8q+74. - P= 120-Q

Long Run Equilibrium Consider a perfect competitive market with n identical firms. The cost functions of an individual firm are: The market demand is given by TC=q³ 4q² + 74q MC=3q²-8q+74. - P= 120-Q

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

D,E,F

**Long Run Equilibrium**

Consider a perfectly competitive market with \( n \) identical firms. The cost functions of an individual firm are:

\[
TC = q^3 - 4q^2 + 74q
\]

\[
MC = 3q^2 - 8q + 74
\]

The market demand is given by:

\[
P = 120 - Q
\]

#### Instructions:

a) Graph two representations: one for the market and one for an individual firm to demonstrate the long-run equilibrium.

b) Determine the output per firm in the long run, \( q = \ldots \), ensuring the firm operates at its minimum cost.

c) Establish the long-run equilibrium price, \( P = \ldots \), with justification.

d) Calculate the total market quantity purchased, \( Q = \ldots \), with reasoning.

e) Assess the number of firms that can exist in equilibrium, \( n = \ldots \) firms.

f) Explain why no additional market entry occurs.

g) Clearly label all equilibrium values on your graph.

Feel free to use this information to understand the conditions for long-run equilibrium in a perfectly competitive market and to visualize through graphs.

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