2) Long run market equilibrium Consider a market with small, identical, price-taking firms, each of which has long run total cost: TC = 3q² + a) Calculate marginal and average costs. What is each firm's exit price, and what is the minimum quantity each would be willing to supply? b) Find the long-run equilibrium price if this market is perfectly competitive. c) If market demand is given by QD = 10 – P, how many firms will this market have in the long run perfectly competitive equilibrium? d) If demand for this product increases to Qº = 23 – P, how many more firms will enter the market? e) Find the firm-level supply function g$(P). Did you need to find it before now?

2) Long run market equilibrium Consider a market with small, identical, price-taking firms, each of which has long run total cost: TC = 3q² + a) Calculate marginal and average costs. What is each firm's exit price, and what is the minimum quantity each would be willing to supply? b) Find the long-run equilibrium price if this market is perfectly competitive. c) If market demand is given by QD = 10 – P, how many firms will this market have in the long run perfectly competitive equilibrium? d) If demand for this product increases to Qº = 23 – P, how many more firms will enter the market? e) Find the firm-level supply function g$(P). Did you need to find it before now?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 10PA

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