Answered: total cost function for this market is…

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

total cost function for this market is TC = 500 + 10Q²

1. What are the profit-maximizing quantity, price, and profit for this market?

2. If there are two firms Atlas and Bowden in this market with the same earlier total cost function and they engage in Cournot competition, what is each firm's equilibrium quantity, price, and profit? [NB: round quantities to nearest integer to find equilibrium quantity, price, and profit]

Is this a long run equilibrium? Why or why not?

Q
0
2
4
6
8
10
12
P
220
200
180
160
140
120
100
TR
0
400
720
960
1120
1200
1200
MR
400
320
240
160
80
0
TC
500
500 + 10(2)² = 540
500 + 10(4)² = 660
500 + 10(6)² = 860
500 + 10(8)² = 1140
500 + 10(10)² = 1500
500 + 10(12)2 = 1940
MC
40
120
200
280
360
440

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