Suppose that the perfectly competitive for market for milk is made up of identical firms with long-run total cost functions given by: TC = 4 q³-24 q² + 40 q Where, q = litres of milk. Assume that these cost functions are independent of the number of firms in the market and that firms may enter or exist the market freely. If the market demand is : 1. What is the long-run equilibrium price? Number Qd = 6,000 120 P 2. What is the quantity produced by each firm? Number 3. What is the number of firms in the industry? Number 4. Suppose that market demand increases to Qd = 11,000 - 157.14 P. What is the new long-run equilibrium number of firms?

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Suppose that the perfectly competitive for market for milk is made up of identical firms with long-run total cost functions given by:
TC = 4q³-24 q² + 40 q
Where, q = litres of milk. Assume that these cost functions are independent of the number of firms in the market and that firms may
enter or exist the market freely.
If the market demand is :
1. What is the long-run equilibrium price? Number
Qd = 6,000 - 120 P
2. What is the quantity produced by each firm? Number
3. What is the number of firms in the industry? Number
4. Suppose that market demand increases to Qd = 11,000 - 157.14 P. What is the new long-run equilibrium number of firms?
Number
Transcribed Image Text:Suppose that the perfectly competitive for market for milk is made up of identical firms with long-run total cost functions given by: TC = 4q³-24 q² + 40 q Where, q = litres of milk. Assume that these cost functions are independent of the number of firms in the market and that firms may enter or exist the market freely. If the market demand is : 1. What is the long-run equilibrium price? Number Qd = 6,000 - 120 P 2. What is the quantity produced by each firm? Number 3. What is the number of firms in the industry? Number 4. Suppose that market demand increases to Qd = 11,000 - 157.14 P. What is the new long-run equilibrium number of firms? Number
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