A market is at the perfectly competitive long run equilibrium, with market price equal to 2. All firms have the cost function TC(q)=5q−6q2+3q3 over the relevant range of output q. Suppose the market demand is 100 units at this price. How many firms are there in the market?

A market is at the perfectly competitive long run equilibrium, with market price equal to 2. All firms have the cost function TC(q)=5q−6q2+3q3 over the relevant range of output q. Suppose the market demand is 100 units at this price. How many firms are there in the market?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Perfect Competition

Section9.3: Perfect Competition In The Long Run

Problem 3ST

See similar textbooks

Related questions

Q: A competitive firm's total cost is TC(Q)=3Q2+7Q+35 when the output level is Q. Accordingly, its…

A: In a competitive market, the equilibrium occurs at, P=MC.

Q: If a perfectly competitive firm decreases production from 11 units to 10 units and the market price…

A: Revenue refers to the amount of money earned by the firms by selling the goods and services in the…

Q: If a perfectly competitive firm increases production from 10 units to 11 units and the market price…

A: The perfect-competition is a form of market, where all the firms are price-taker and the prices(P)…

Q: Based on the table below for a perfectly competitive firm: Fixed Variable Total Quantity Cost Cost…

A: Marginal Cost = Change in Total Cost / Change in Quantity X = (1000-500)/(40-30) X = 500/10 = 50…

Q: In a perfectly competitive market a firm produces where equals to . If MR is greater than MC, the…

A: In perfect competition, there are large number of firms selling identical goods

Q: The graph below shows a perfectly competitive firm in short run equilibrium, where the firm has…

A: Ans) The correct option is - a) price will decrease until economic profit is zero.

Q: True or false ? why ? 1. In the long run, a perfectly competitive firm with diseconomies of scale…

A: Note: You have uploaded multiple questions at a time. Hence we shall answer only the first one for…

Q: Lasguns are produced by identical firms in a perfectly competitive market. Each firm's Total Cost…

A: A perfectly competitive market is characterized by a large number of buyers and sellers. The market…

Q: Lasguns are produced by identical firms in a perfectly competitive market. Each firm's Total Cost…

A: The average total cost is computed by dividing the total cost by the quantity that the company is…

Q: Which of the following is generally true in a perfectly competitive industry? * A firm's supply…

A: Firms aim to for profit maximization thus they tend to produce a profit maximizing quantity.

Q: Derive the optimization condition of a profit-maximizing firm that operates in a perfectly…

A: In a perfectly competitive market situation, to maximize the profit, the firms set the optimization…

Q: You are a consultant on profit maximization. What do you recommend in each of the cases below for a…

A: Perfect competition is a market condition when many sellers are selling homogenous products. The…

Q: At the current short-run market price, firms will in the short run. In the long run,

A: here it is seen that the firms are not incurring any fixed cost. and the price is equal to average…

Q: Suppose that there are 40 firms in a market, each with the following cost function: C(q) = 44 + 3q².…

A: Given: C(q)=44+3Q^2 D(p)=1260-25p

Q: Long-Run Competitive Equilibrium it is included as a cost and are not included in economic profit.…

A: Perfect competition denotes the highest level of competition among all market structures. Under…

Q: Assuming a horizontal long-run market supply curve, which of the following statements is (are) TRUE…

A: In the long run, a perfectly competitive firm produces at a level of output where P = MC = AC. At…

Q: Lasguns are produced by identical firms in a perfectly competitive market. Each firm's Total Cost…

A: A perfectly competitive market is one that has a large number of buyers and sellers, selling…

Q: Which of the following is NOT necessarily true about the long-run equilibrium of a perfectly…

A: A perfectly competitive firm is a price taker and choses the level of output where marginal cost…

Q: The second-order condition for a firm maximizing its profits operating in a perfectly competitive…

A: Profit is maximized at the point where the marginal cost is equal to marginal revenue.

Q: perfect competition

A: There are different forms of market such as Perfect and Imperfect form. These includes different…

Q: There are several identical firms in a perfectly competitive market in the long run. Each firm faces…

A: A perfectly competitive firm produces at P = MC = ATC in long run. ----------------------- TC = 400…

Q: In the long-run equilibrium in a perfectly competitive market,: a . the firms make an economic…

A: In the long-run equilibrium in a perfectly competitive market, the firms make only normal profits .…

Q: In a perfectly competitive market, each firm produces its last unit at the same marginal cost. a…

A: As per the question the perfectly competitive market usually refers to that market where all the…

Q: Suppose the market for cat food is perfectly competitive, with each firm having the total cost…

A: At the point when market price = MC, a profit-maximizing fully competitive company produces. In…

Q: In a perfect competition, the cost function of each of 100 firms is given as: 300 + 0.2q² + 4q + 10…

A: Total Cost, C = q3300+0.2q2 + 4q + 10Market demand, Q = 8000 - 200PFirm demand, Q = 8000 -…

Q: If a perfectly competitive firm’s supply curve is given by Q = -18 + P, which of the following is…

A: The supply curve, Q = -18 + P

Q: The market for fertilizer is perfectly competitive. Firms in the market are producing output but are…

A: A perfectly competitive market is characterized by a large number of buyers and sellers. The market…

Q: Which of the following is always true when a perfectly competitive firm is producing at a profit…

A: In perfect competition, price is always constant. Marginal cost equals the increase in total cost…

Q: If the market for donuts is perfectly competitive and all firms are producing a quantity that…

A: A market structure refers to the degree and nature of competition present in the market for goods…

Q: Consider a perfectly competitive market that was in a long-run equilibrium when a permanent increase…

A: A perfectly competitive market is one where there are several buyers and seller such that, all…

Q: If the price in this market is $50, find the profit maximizing output of firm A by explaining the…

A: In a perfect competition market, there is a large number of firms that produce homogeneous products…

Q: Consider the market for ice cream. Suppose that this market is perfectly competitive. The cost…

A: Firms in perfect competition earn zero economic profit in the long run. This means price is equal to…

Q: Consider the market for ice cream. Suppose that this market is perfectly competitive. The cost…

A: Answer: A perfectly competitive firm maximizes its profit where the average total cost (ATC) is…

Q: Consider a competitive industry with several identical firms. The long run average cost of a firm…

A: There are various forms of market structure. These are perfect competition, monopoly, monopolistic…

Q: In a purely competitive market at its long-run equilibrium, which of the following is not true? a…

A: Perfect competition refers to the situation where there are many buyers and sellers exist in the…

Q: All markets that are not perfectly competitive have which of the following characteristics? Each…

A: In non perfectly competitive market, there are barriers to entry so new firms can not enter the…

Q: (Question 4 of 4): Consider that a perfectly competitive constant long-run cost industry with…

A: The market demand is given as well as the Total cost function of the identical firms is given. The…

Q: Consider the market for ice cream. Suppose that this market is perfectly competitive. The cost…

A: Given for the ice cream market:- ATC(Q) = (50/Q) + (Q/2) (Average Total Cost)…

Q: Lasguns are produced by identical firms in a perfectly competitive market. Each firm's Total Cost…

A: Long-Term Market Equilibrium In a completely competitive market, the long-run equilibrium occurs…

Q: Firms in the market for dog food are selling in a purely competitive market. A firm producing dog…

A: There are no entry barriers in the perfectly competitive firm. In the long run firms can enter and…

Q: Consider the following graph of the average and marginal cost functions for a firm in a perfectly…

A: Note:- Since we can only answer up to three subparts, we'll answer the first three. Please repost…

Q: What is the formula for profit maximization by firm ? Why does this result in the marginal cost…

A: The profit for a firm can be calculated by subtracting the total cost (TC) from the total revenue…

Q: Suppose that the identical firms in a perfectly competitive market for cakes have long-run total…

A: To calculate P we know that MC is equal to The ATC in the long-run supply curve because the…

Q: The following diagrams show the market for a good, as well as the cost curves for an individual firm…

A: The below curve shows the individual firm's cost curve and the second graph shows the market demand…

Q: At the current short-run market price, firms will in the short run. In the long run,

A: please find the answer below.

Q: A firm that behaves in a perfectly competitive fashion has the following cost function: C(Q)=Q² +20…

A: In perfectly competitive market, price is constant at all levels of output. Profit is maximized at a…

Q: Firms in the market for dog food are selling in a purely competitive market. A firm producing dog…

A: A competitive market is one in which numerous producers compete for the goods and services that we,…

Q: A perfectly competitive firm has the cost function TC = 1000 + 2Q + 0.1 Q2. What is the lowest price…

A: In perfect competition, eqm is found by the intersection of MC(marginal cost) and P(price).…

Question

A market is at the perfectly competitive long run equilibrium, with market price equal to 2. All firms have the cost function TC(q)=5q−6q2+3q3 over the relevant range of output q.

Suppose the market demand is 100 units at this price. How many firms are there in the market?

Definition Definition Structure of the market that exists when many buyers and sellers exchange similar commodities and prices are fixed by market forces, demand, and supply. When there is perfect competition, a single business cannot impact the price or market value of the homogenous product.

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!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

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.

Similar questions

The market for drones is perfectly competitive. Assume for simplicity that fractions of everything, including number of firms, is possible. We have identical firms, each with a Total Cost curve of TC=862+q^2 and Marginal Cost curve MC=2q. Market demand is Q=856-2P. What is the number of firms in the market in the long run equilibrium?
Suppose that many small firms operating in the perfectly competitive market set-up. All firms are identical and have the total cost function c (q)= 40+8q+(q^2/10), where q is the individual firm’s production amount. The market inverse demand function is described as P= A - (Q/50), where A>0 is constant, and Q is the market quantity. In the short-run equilibrium, there are 78 firms in the market, and firm’s maximum profit is $22.5 a) find the short-run equilibrium price b) suppose that in the long-run, firms cost function is still the same C (q)= 40+8q+(q^2/10) (assume LR cost function has fixed component of 40) Find the long-run equilibrium number of firms? (Assume market demand in LR = market demand SR)
Glowglobes are produced by identical firms in a perfectly competitive market. There are 22 firms in the market. Each firm's Total Cost function is TC=284+3q+q^2 and Marginal Cost function is MC=3+2q. Market demand is Q=326-P. What is the short-run equilibrium market price?
Glowglobes are produced by identical firms in a perfectly competitive market. There are 19 firms in the market. Each firm's Total Cost function is TC=396+2q+q^2 and Marginal Cost function is MC=2+2q. Market demand is Q=484-P. What is the profit earned by each firm in the short-run?
A firm that behaves in a perfectly competitive fashion has the following cost function: C(Q)=Q² +20 +25. For the current market price, the firm is producing where the total average cost is minimum. What is the market price? Select one: a. 25 b. 5 c. 12 d. 60
A competitive industry consists of 100 identical firms. The short run cost function of each firm is given by C(q)=200q+15q^2 What is the supply function for each firm?
Which of the following is not a necessary condition for long-run equilibrium under perfect competition? A)no firm has an incentive to enter the market b)no firm has an incentive to exit the market c)prices are relatively low d)each firm earns zero economic profit
A competitive industry consists of 100 identical firms. The short run cost function of each firm is given by C(q)=200q+15q^2 What is the market supply function?
To maximize profit in the short-run, a perfectly competitive firm will search for that output at which of the following? marginal revenue equals firm demand. price equals marginal revenue. average revenue equals marginal cost. average total cost equals marginal cost. firm demand equals price.
Lasguns are produced by identical firms in a perfectly competitive market.Each firm's Total Cost function is TC=404+q^2 and Marginal Cost functionis MC=2q. Market demand is Q=621-P. How many firms are in the market in the long-run?
Lasguns are produced by identical firms in a perfectly competitive market. Each firm's Total Cost function is TC=579+12q+q^2 and Marginal Cost function is MC=12+2q. What quantity does each firm produce in the long-run equilibrium?
The graph below shows a perfectly competitive firm in short run equilibrium, where the firm has chosen the output level maximizing its profit. Consider the level of profits being earned here, and what will happen over time. What will happen in the long run? Note that the horizontal demand curve, D1, is also equivalent to marginal revenue and price. Group of answer choices The market price will increase causing economic profits to increase Demand will increase causing economic profits to increase The market price will decrease until economic profit is zero