3. Suppose that the industry is aconstant cost industry and entryand exit of firms are allowed.Assume the firm's long-runcost function is given byLC = 9-0.2g +4q .a. Identify the most efficientplant size for the firm in thelong-run by calculating theequilibrium output level.Brief discuss the processused to get your answer.b. Calculateequilibrium market price inthis industry. Brief discussthe process used to get yourthelong-runanswer.c. If the market demand forthese firm's product is Q =8,000 - 200p", determinethe number of firms in themarket under a long-runequilibrium. Brief discussthe process used to get youranswer.

Given LC=1300q3-0.2q2+4q ... (1) The most efficient plant size of a firm in long run is…

3. Suppose that the industry is a constant cost industry and entry and exit of firms are allowed. Assume the firm's long-run cost function is given by LC =9-0.2g +4q. 300 a. Identify the most efficient plant size for the firm in the long-run by calculating the equilibrium output level. Brief discuss the process used to get your answer. b. Calculate the equilibrium market price in this industry, Brief discuss the process used to get your long-run answer. c. If the market demand for these firm's product is Q 8,000 200p", determine the number of firms in the market under a long-run equilibrium. Brief discuss the process used to get your answer.

3. Suppose that the industry is a constant cost industry and entry and exit of firms are allowed. Assume the firm's long-run cost function is given by LC =9-0.2g +4q. 300 a. Identify the most efficient plant size for the firm in the long-run by calculating the equilibrium output level. Brief discuss the process used to get your answer. b. Calculate the equilibrium market price in this industry, Brief discuss the process used to get your long-run answer. c. If the market demand for these firm's product is Q 8,000 200p", determine the number of firms in the market under a long-run equilibrium. Brief discuss the process used to get your answer.

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 3E

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