The market for chocolate covered macadamias is characterised by demand Qd =200 p. Initially, there are only 10 firms selling chocolate covered macadamias, and strict barriers to entry prevent any new firms from entering the market. Each has costs given by c(q) = q² + 6 for q > 0 and c(g) = 0 for q = 0. If rounding is needed, please round your answers to 3 decimal places. a) (0.5 point) If all 10 firms behave like price-takers, what will be the price of chocolate covered macadamias? 33.3 b) (0.5 point) Now barriers to entry are lifted, and any number of identical firms (with the same cost structure) can enter. How many new firms (i.e. not counting the original 10) will have entered when the market is in long run equilibrium? 79.9 c) (1 point) Now suppose a new type of firm with a new technology for producing chocolate covered macadamias arrives on the scene. Each of these new firms has costs given by c(q) = q² + 3 for q > 0 and c(q) = 0 for q = 0. If there are no barriers to entry or exit for either the old or new firms, in the long run equilibrium, how many of the new firms will be operating in the market? 79.9 d) (0.5 point) How many of the old firms (with the original cost structure) will be operating in the market? 80
The market for chocolate covered macadamias is characterised by demand Qd =200 p. Initially, there are only 10 firms selling chocolate covered macadamias, and strict barriers to entry prevent any new firms from entering the market. Each has costs given by c(q) = q² + 6 for q > 0 and c(g) = 0 for q = 0. If rounding is needed, please round your answers to 3 decimal places. a) (0.5 point) If all 10 firms behave like price-takers, what will be the price of chocolate covered macadamias? 33.3 b) (0.5 point) Now barriers to entry are lifted, and any number of identical firms (with the same cost structure) can enter. How many new firms (i.e. not counting the original 10) will have entered when the market is in long run equilibrium? 79.9 c) (1 point) Now suppose a new type of firm with a new technology for producing chocolate covered macadamias arrives on the scene. Each of these new firms has costs given by c(q) = q² + 3 for q > 0 and c(q) = 0 for q = 0. If there are no barriers to entry or exit for either the old or new firms, in the long run equilibrium, how many of the new firms will be operating in the market? 79.9 d) (0.5 point) How many of the old firms (with the original cost structure) will be operating in the market? 80
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:The market for chocolate covered macadamias is characterised by demand Qd =200 p. Initially, there are only 10 firms
selling chocolate covered macadamias, and strict barriers to entry prevent any new firms from entering the market. Each has
costs given by c(q) = q² + 6 for q > 0 and c(g) = 0 for q = 0.
If rounding is needed, please round your answers to 3 decimal places.
a) (0.5 point) If all 10 firms behave like price-takers, what will be the price of chocolate covered macadamias?
33.3
b) (0.5 point) Now barriers to entry are lifted, and any number of identical firms (with the same cost structure) can enter. How
many new firms (i.e. not counting the original 10) will have entered when the market is in long run equilibrium?
79.9
c) (1 point) Now suppose a new type of firm with a new technology for producing chocolate covered macadamias arrives on the
scene. Each of these new firms has costs given by c(q) = q² + 3 for q > 0 and c(q) = 0 for q = 0. If there are no barriers to
entry or exit for either the old or new firms, in the long run equilibrium, how many of the new firms will be operating in the market?
79.9
d) (0.5 point) How many of the old firms (with the original cost structure) will be operating in the market?
80
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education