Suppose a firm operating in a perfectly competitive industry has costs in the short run given by: SRTC = 8 + 1/2Q^2 and therefore MC = q. (c) Assuming that the firm is a price-taker operating in a competitive market, derive an expression for the fiirm's supply curve, (the profit maximizing output for the firm as a function of the market price, i.e., qS = f(p). Assuming the firm is one of 100 identical firms in the industry, what is the short-run supply curve for the industry, i.e., QS = f(p)? If demand is given by QD = 1000 – 100p, what are the short-run equilibrium price, market quantity, and firm quantity? Is this a long-run equilibrium? [Hint: Calculate firm profit in the equilibrium.]

Suppose a firm operating in a perfectly competitive industry has costs in the short run given by: SRTC = 8 + 1/2Q^2 and therefore MC = q. (c) Assuming that the firm is a price-taker operating in a competitive market, derive an expression for the fiirm's supply curve, (the profit maximizing output for the firm as a function of the market price, i.e., qS = f(p). Assuming the firm is one of 100 identical firms in the industry, what is the short-run supply curve for the industry, i.e., QS = f(p)? If demand is given by QD = 1000 – 100p, what are the short-run equilibrium price, market quantity, and firm quantity? Is this a long-run equilibrium? [Hint: Calculate firm profit in the equilibrium.]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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