Consider a competitive industry. All firmes are identical with Average Total Cost given by: ATC=(-10)²+1+N where y is the individual firm level of output and N is the number of firms. Note that production costs increase with the number of firms (for example even though this is a competitive market, each firm may have to spend more on advertising costs when there are more firms to compete with). (a)) What is the long term equilibrium price, supposing that N is known? (b) What is the long term equilibrium quantity produced by each firm? What is the equilibrium market quantity produced? (once again auming N is known) (e) (Suppose that market demand is Y-100-p. Find the long term equilibrium number of firme N", long term individual firm's output y, long term industry output Yand long term equilibrium price

Consider a competitive industry. All firmes are identical with Average Total Cost given by: ATC=(-10)²+1+N where y is the individual firm level of output and N is the number of firms. Note that production costs increase with the number of firms (for example even though this is a competitive market, each firm may have to spend more on advertising costs when there are more firms to compete with). (a)) What is the long term equilibrium price, supposing that N is known? (b) What is the long term equilibrium quantity produced by each firm? What is the equilibrium market quantity produced? (once again auming N is known) (e) (Suppose that market demand is Y-100-p. Find the long term equilibrium number of firme N", long term individual firm's output y, long term industry output Yand long term equilibrium price

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter2: Mathematics For Microeconomics

Section: Chapter Questions

Problem 2.2P

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