= 3. Assume that the manufacturing of generic medicine XYZ is a perfectly competitive industry. Suppose that the annual demand for this medicine is given by: QD 1,450-30P. There are exactly a hundred manufacturers in the market. Each manufacturer has the same production costs. These are described by total and marginal cost functions of: C(q) = 2q² + 25q +2.5 and MC(q) = 5q + 25. a. Show that an individual firih in this industry maximizes profit by producing: q = -5 +0.2P. b. Derive the industry supply curve and show that it is: QS = -500 + 20P. c. Find the market price and aggregate quantity traded at the equilibrium price. II

= 3. Assume that the manufacturing of generic medicine XYZ is a perfectly competitive industry. Suppose that the annual demand for this medicine is given by: QD 1,450-30P. There are exactly a hundred manufacturers in the market. Each manufacturer has the same production costs. These are described by total and marginal cost functions of: C(q) = 2q² + 25q +2.5 and MC(q) = 5q + 25. a. Show that an individual firih in this industry maximizes profit by producing: q = -5 +0.2P. b. Derive the industry supply curve and show that it is: QS = -500 + 20P. c. Find the market price and aggregate quantity traded at the equilibrium price. II

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 11PA: Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + q2...

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