There are 80 firms of type A and 60 firms of type B in a perfectly competitivemarket. On one hand, type A firm faces a fixed cost (all sunk) of $12 and averagevariable cost is 2q. On the other hand type B firm faces a fixed cost (all sunk) of $100and the variable cost is 3q. Market demand function is given by Q=D1200-70P. Findthe equilibrium quantity of a type A firm and its profit, respectively.q-3, profit-$6q-2, profit-$4Oq=4, profit=$4Oq=5, profit=$23

Correct : q= 3, profit = $6 Market supply is the summation of 80*marginal cost of each firm A +…

Answered: There are 80 firms of type A and 60…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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There are 80 firms of type A and 60 firms of type B in a perfectly competitive
market. On one hand, type A firm faces a fixed cost (all sunk) of $12 and average
variable cost is 2q. On the other hand type B firm faces a fixed cost (all sunk) of $100
and the variable cost is 3q. Market demand function is given by Q=D1200-70P. Find
the equilibrium quantity of a type A firm and its profit, respectively.
q-3, profit-$6
q-2, profit-$4
Oq=4, profit=$4
Oq=5, profit=$23

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There are 80 firms of type A and 60 firms of type B in a perfectly competitive market. On one hand, type A firm faces a fixed cost (all sunk) of $12 and average variable cost is 2q. On the other hand type B firm faces a fixed cost (all sunk) of $10 and the variable cost is 3q. Market demand function is given by Q = 1200 - 70P Find the equilibrium price in the market . 8 12 10 7

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