Nicole wants to examine first if she wants to enter the market for Chanel bags and she assumes that the market is under perfect competition. She observed that all the firms that are producing Chanel bags have the same LR cost function and is given by C = 200 + 20q+0.5q². All firms present in the market has a fixed cost of $200 if it produces a positive output, otherwise the LR cost is zero if there is zero production. The market demand for Chanel bags is QD = 1000 - 2p, where p is the price of one umbrella. Currently, Nicole counted that there are 22 firms in the industry and that the market is a constant cost industry. (a) How many Chanel bags will be produced by each of the 22 firms present in the LR equilibrium?
Nicole wants to examine first if she wants to enter the market for Chanel bags and she assumes that the market is under perfect competition. She observed that all the firms that are producing Chanel bags have the same LR cost function and is given by C = 200 + 20q+0.5q². All firms present in the market has a fixed cost of $200 if it produces a positive output, otherwise the LR cost is zero if there is zero production. The market demand for Chanel bags is QD = 1000 - 2p, where p is the price of one umbrella. Currently, Nicole counted that there are 22 firms in the industry and that the market is a constant cost industry. (a) How many Chanel bags will be produced by each of the 22 firms present in the LR equilibrium?
Chapter2: Mathematics For Microeconomics
Section: Chapter Questions
Problem 2.8P
Related questions
Question
![Nicole wants to examine first if she wants to enter the market for Chanel bags and she assumes that the
market is under perfect competition. She observed that all the firms that are producing Chanel bags have the
same LR cost function and is given by C = 200+20q+0.5q². All firms present in the market has a fixed cost of
$200 if it produces a positive output, otherwise the LR cost is zero if there is zero production. The market
demand for Chanel bags is QD = 1000-2p, where p is the price of one umbrella. Currently, Nicole counted that
there are 22 firms in the industry and that the market is a constant cost industry.
(a) How many Chanel bags will be produced by each of the 22 firms present in the LR equilibrium?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0fbeb02a-5664-467a-b5f1-aa2b384d0b69%2Fa57384cd-a944-4480-ab65-a0f7ac303aa6%2Fos68s6.jpeg&w=3840&q=75)
Transcribed Image Text:Nicole wants to examine first if she wants to enter the market for Chanel bags and she assumes that the
market is under perfect competition. She observed that all the firms that are producing Chanel bags have the
same LR cost function and is given by C = 200+20q+0.5q². All firms present in the market has a fixed cost of
$200 if it produces a positive output, otherwise the LR cost is zero if there is zero production. The market
demand for Chanel bags is QD = 1000-2p, where p is the price of one umbrella. Currently, Nicole counted that
there are 22 firms in the industry and that the market is a constant cost industry.
(a) How many Chanel bags will be produced by each of the 22 firms present in the LR equilibrium?
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