Answered: The Market for Good X is perfectly…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Instructions: Answer to the best of your ability. Show all of your work, the details, excel tab.

The Market for Good X is perfectly competitive, with market supply and own-price demand curves given as

q_s=-25000 + 3000p

q_d=135000-5000p

a. Determine the equilibrium price and quantity in the market for good x. (Note: You are not anlayzing an individual firm here. You are analyzing the entire market).

Suppose the individual firm's average total costs are dfined by

TC=1/3q^3-3q^2+28q+2

b. What is the firm's demand curve (don't give me back the industry demand curve. The firm's demand curve is what I want.)

c. find the profit maximizing level of output for the firm (I've given the marginal cost curve below).

MC=q^2-6q+28

d. If this firm is making a profit (loss) how much is the profit (loss)?

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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