4. Suppose that each firm in a competitive industry has thefollowing costs:Total cost: TC = 500 + 0.5qMarginal cost: MC = qWhere q is an individual firm's quantity produced. The marketdemand curve for this product isDemand: Q" = 120 – PWhere P is the price and Q is the total quantity of the good.Currently, there are 9 firms in the market(a) What is each firm's fixed cost? What is its variable cost?Give the equation for average total cost.(b) Graph average-total-cost curve and the marginal-cost curvefor q from 5 to 15. At what quantity is average-total-cost curveat its minimum? What is marginal cost and average total cost atthat quantity?(c) Give the equation for each firm's supply curve.(d) Give the equation for the market supply curve for the shortrun in which the number of firms is fixed.(e) What is the equilibrium price and quantity for this market inthe short run?(f) In this equilibrium, how much does each firm produce?Calculate each firm's profit or loss. Is there incentive for firmsto enter or exit?(g) In the long run with free entry and exit, what is theequilibrium price and quantity in this market?

4. Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 500 + 0.5q Marginal cost: MC = q Where q is an individual firm's quantity produced. The market demand curve for this product is Demand: Q" = 120 – P Where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market (a) What is each firm's fixed cost? What is its variable cost? Give the equation for average total cost.

4. Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 500 + 0.5q Marginal cost: MC = q Where q is an individual firm's quantity produced. The market demand curve for this product is Demand: Q" = 120 – P Where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market (a) What is each firm's fixed cost? What is its variable cost? Give the equation for average total cost.

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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