The handcart market contains many identical firms and operates perfectlycompetitively. Each firm has the short run total cost functionSTC(q) = 400 + 5q+ q² and corresponding short run marginal costfunction SMC(q) = 5 + 2q . Short run average total cost isSAC(q) =400+5+ q.A. What is each fırm's short run supply curve, assuming that price is higherthan the shut-down price?o Use Q2 in "PS7 check your answers" to confirm that your answer iscorrect before continuing.o Firm's short run supply curve, if P > Pshut-down , q° :B. What is the shut-down price in this industry?o Shut-down price:B. What is the shut-down price in this industry?o Shut-down price:C. All firms are earning zero profits. How much is each firm producing?o Hint: if firms earn zero profits (T = 0), then Pq= STC(q) andP = SAC(q) . Combine this with the profit maximization rule ofP = SMC(q).o Use Q3 in "PS7 check your answers" to confirm that your answer is%3D%3Dcorrect before continuing.o Firm-level production: q*D. What is the market price?o Market price: P*%3DE. Market demand is QD3090 – 2P.What is QP at the market price?QDF. At equilibrium, QD = Q$ = nq , where n is the number of firms in themarket. How many firms are operating in this market?o n =

Total Cost function : 400 + 5q + q2 In perfectly competitive market optimal production level is…

The handcart market contains many identical firms and operates perfectl competitively. Each firm has the short run total cost function STC(q) = 400+ 5q + q² and corresponding short run marginal cost function SMC(q) = 5 + 2q . Short run average total cost is SAC(q) = 400 %3D + 5+ q. A. What is each firm's short run supply curve, assuming that price is higl than the shut-down price? LUse 02 in "PS7 check vour answers" to confirm that vour answer

The handcart market contains many identical firms and operates perfectl competitively. Each firm has the short run total cost function STC(q) = 400+ 5q + q² and corresponding short run marginal cost function SMC(q) = 5 + 2q . Short run average total cost is SAC(q) = 400 %3D + 5+ q. A. What is each firm's short run supply curve, assuming that price is higl than the shut-down price? LUse 02 in "PS7 check vour answers" to confirm that vour answer

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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