otal Cost Function (TC) for every firm in perfect competition is: C = 0.1 q2 + q + 10 Industry demand function is Q = 4,000 - 400p 1) Determine profit or loss for every firm if firms number is 100 2) Determine firms numbers to long run equilibrium
Total Cost Function (TC) for every firm in
Industry
1) Determine profit or loss for every firm if firms number is 100
2) Determine firms numbers to long run equilibrium
Total cost function:
Industry demand function:
The industry consists of perfectly competitive firms. The total number of firms in the short run is 100. Due to perfect competition, the market price is determined by industry demand and industry supply equation. Industry supply is a horizontal summation of individual firm supply.
In a perfectly competitive market, individual firms supply output at P =MC. Solving this condition for Q, we will get individual firm supply function.
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