Suppose that the industry is a constant cost industry and entry and exit of firms are allowed. Assume the firm's long-run cost function is given by LC = 9' -0.2q+ 4q . %3D a. Identify the most efficient plant size for the firm in the long-run by calculating the equilibrium output level. Brief discuss the process used to get your answer. b. Calculate long-run equilibrium market price in this industry. Brief discuss the process used to get your the answer. c. If the market demand for these firm's product is Q = 8,000 – 200p", determine the number of firms in the market under a long-run equilibrium. Brief discuss the process used to get your answer,
Suppose that the industry is a constant cost industry and entry and exit of firms are allowed. Assume the firm's long-run cost function is given by LC = 9' -0.2q+ 4q . %3D a. Identify the most efficient plant size for the firm in the long-run by calculating the equilibrium output level. Brief discuss the process used to get your answer. b. Calculate long-run equilibrium market price in this industry. Brief discuss the process used to get your the answer. c. If the market demand for these firm's product is Q = 8,000 – 200p", determine the number of firms in the market under a long-run equilibrium. Brief discuss the process used to get your answer,
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Suppose that the industry is a
constant cost industry and entry
and exit of firms are allowed.
Assume the firm's long-run
function is given by
LC = 3m q' -0.2q+4q .
cost
300
a. Identify the most efficient
plant size for the firm in the
long-run by calculating the
equilibrium output level.
Brief discuss the process
used to get your answer.
b. Calculate
long-run
equilibrium market price in
this industry. Brief discuss
the process used to get your
the
answer.
c. If the market demand for
these firm's product is Q =
8,000 – 200p", determine
the number of firms in the
%3|
market under a long-run
equilibrium. Brief discuss
the process used to get your
answer,
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