The daily demand for pizzas is where P is the price of a pizza. The daily costs for a pizza company initially include $50.00 in fixed costs (which are avoidable in the long run but sunk in the short run), and variable costs equal to VC= =(Q²/2), where Q is the number of pizzas produced in a day. Marginal cost is MC = Q. Suppose that in the long run there is free entry into the market. Assume fixed costs fall to $18 and, in the short run, the number of firms is fixed (so that neither entry nor exit is possible) and fixed costs are sunk. Instructions: Round your answers to the nearest whole number. a. What is the new market equilibrium in the short run? Q" = P = $ There are P" = Qd = 780-25P pizzas. There are b. What is the new market equilibrium in the long run? firms in the short run. pizzas. firms in the long run.
The daily demand for pizzas is where P is the price of a pizza. The daily costs for a pizza company initially include $50.00 in fixed costs (which are avoidable in the long run but sunk in the short run), and variable costs equal to VC= =(Q²/2), where Q is the number of pizzas produced in a day. Marginal cost is MC = Q. Suppose that in the long run there is free entry into the market. Assume fixed costs fall to $18 and, in the short run, the number of firms is fixed (so that neither entry nor exit is possible) and fixed costs are sunk. Instructions: Round your answers to the nearest whole number. a. What is the new market equilibrium in the short run? Q" = P = $ There are P" = Qd = 780-25P pizzas. There are b. What is the new market equilibrium in the long run? firms in the short run. pizzas. firms in the long run.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![The daily demand for pizzas is
where P is the price of a pizza. The daily costs for a pizza company initially include $50.00 in fixed costs (which are avoidable in the
long run but sunk in the short run), and variable costs equal to
VC = (Q²/2),
where Q is the number of pizzas produced in a day. Marginal cost is
MC = Q.
Suppose that in the long run there is free entry into the market. Assume fixed costs fall to $18 and, in the short run, the number of firms
is fixed (so that neither entry nor exit is possible) and fixed costs are sunk.
Instructions: Round your answers to the nearest whole number.
a. What is the new market equilibrium in the short run?
P* = $
There are
P = $
pizzas.
There are
Qd = 780-25P
b. What is the new market equilibrium in the long run?
firms in the short run.
pizzas.
firms in the long run.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6193abcc-7a0d-4cf2-a4bd-fba03b3cd85d%2F08fadc01-c0fa-4af0-b8a5-1585da065ce9%2Fva7a829_processed.png&w=3840&q=75)
Transcribed Image Text:The daily demand for pizzas is
where P is the price of a pizza. The daily costs for a pizza company initially include $50.00 in fixed costs (which are avoidable in the
long run but sunk in the short run), and variable costs equal to
VC = (Q²/2),
where Q is the number of pizzas produced in a day. Marginal cost is
MC = Q.
Suppose that in the long run there is free entry into the market. Assume fixed costs fall to $18 and, in the short run, the number of firms
is fixed (so that neither entry nor exit is possible) and fixed costs are sunk.
Instructions: Round your answers to the nearest whole number.
a. What is the new market equilibrium in the short run?
P* = $
There are
P = $
pizzas.
There are
Qd = 780-25P
b. What is the new market equilibrium in the long run?
firms in the short run.
pizzas.
firms in the long run.
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