2. The widget market is characterized by perfect competition. The "inverse" market demand is P = 30 – 0.05Q, while the market supply is Q = -100 + 20P. The firms are identical, and the cost structure of a typical firm is TCi = 200 + 5Qi + 0.5Q¡2, with MCi = 5 + Qi b) Solve for the optimal output level for a typical firm.

2. The widget market is characterized by perfect competition. The "inverse" market demand is P = 30 – 0.05Q, while the market supply is Q = -100 + 20P. The firms are identical, and the cost structure of a typical firm is TCi = 200 + 5Qi + 0.5Q¡2, with MCi = 5 + Qi b) Solve for the optimal output level for a typical firm.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Firms In Competitive Markets

Section: Chapter Questions

Problem 1CQQ

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