Assume the market for tortillas is perfectly competitive. The market supply and demand curves for tortillas are given as follows Supply curve:P = 5Q Demand curve: P = 120 - 10Q The short run marginal cost curve for a typical tortilla factory is: MC = 20q Assuming all tortilla factories are identical, calculate the following: Equilibrium price for tortillas: 1 8 Profit maximizing short run equilibrium level of output for a tortilla factory: (2) Given profit maximizing output as above, a tortilla factory is: (3 Total number of tortilla factories: Producer surplus of a tortilla factory:

Assume the market for tortillas is perfectly competitive. The market supply and demand curves for tortillas are given as follows Supply curve:P = 5Q Demand curve: P = 120 - 10Q The short run marginal cost curve for a typical tortilla factory is: MC = 20q Assuming all tortilla factories are identical, calculate the following: Equilibrium price for tortillas: 1 8 Profit maximizing short run equilibrium level of output for a tortilla factory: (2) Given profit maximizing output as above, a tortilla factory is: (3 Total number of tortilla factories: Producer surplus of a tortilla factory:

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 1SCQ: Firms ill a perfectly competitive market are said to be price takers that is, once the market...

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