Suppose you are given the following information about a particular industry Q(d) = 6500 - 100P Market Demand Q(s) = 1200P Market Supply C(q) = 722 + q^2/200 Firm total cost function MC(q) = 2q/200 Firm marginal cost function Assume that all firms in this industry are identical and that the market is characterized as perfect competition. Find the equilibrium price, the equilibrium quantity, the output supplied by the firm, and the profit of each firm. Would you expect to see entry into or exit from the industry in the long run? What effect would this entry or exit have on market equilibrium? What is the lowest price at which each firm would stay and sell its output in the long run? Is profit positive, negative or zero at this price?
Suppose you are given the following information about a particular industry
Q(d) = 6500 - 100P Market Demand
Q(s) = 1200P Market Supply
C(q) = 722 + q^2/200 Firm total cost function
MC(q) = 2q/200 Firm marginal cost function
Assume that all firms in this industry are identical and that the market is characterized as
Find the
Would you expect to see entry into or exit from the industry in the long run? What effect would this entry or exit have on
What is the lowest price at which each firm would stay and sell its output in the long run? Is profit positive, negative or zero at this price?
What is the lowest price at which each firm would sell its output in the short run? Is profit positive, negative, or zero at this price?
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