3. Suppose a representative firm in a perfectly competitive industry has the following total cost of production in the short run: TC=Q^3-40Q^2+600Q. a. What will be the long run equilibrium quantity for the firm? What will be the long run equilibrium price in this industry? b. Let the industry demand be given by QD=12400-4P. How many firms will be active in the long-run equilibrium? c. Suppose the firm faces a positive demand shock that increases the industry demand to QD=16000-4P. Describe how the industry would respond and calculate the change in the number of firms.
3. Suppose a representative firm in a perfectly competitive industry has the following total cost of production in the short run: TC=Q^3-40Q^2+600Q. a. What will be the long run equilibrium quantity for the firm? What will be the long run equilibrium price in this industry? b. Let the industry demand be given by QD=12400-4P. How many firms will be active in the long-run equilibrium? c. Suppose the firm faces a positive demand shock that increases the industry demand to QD=16000-4P. Describe how the industry would respond and calculate the change in the number of firms.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter10: Prices, Output, And Strategy: Pure And Monopolistic Competition
Section: Chapter Questions
Problem 6E
Related questions
Question
13. Suppose a representative firm in a
cost of production in the short run: TC=Q^3-40Q^2+600Q.
a. What will be the long run
run
b. Let the industry
in the long-run equilibrium?
c. Suppose the firm faces a positive demand shock that increases the industry demand
to QD=16000-4P. Describe how the industry would respond and calculate the
change in the number of firms.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning