Could I have help understanding this? Firm änd MarketIn this exercise and the next, we compare a perfectly com etitive market to a monoj.oly. First,consider a perfectly competitive widget industry that h s adjusted to long-run equilibrium:Each firm earns zero economic profit, so there is no incen ve for firms either to enter or to exit.Each firm has chosen a (short run) plant size that allows it to achieve the minimum achievablelong-run average cost, so there is no incentive for any firm either to enlarge cr to contract itsscale of operation. Let Q = industry output and q = the output of any single firm.There are n identical firms:Q = nqEach firm's short-run total cost is:TC = 90 + 2.5q?Market demand (D) for the product is:P = 60 -- 2QWrite the equations of each firm's marginal cost, average v. riable cost, and average cost.MC =AVC =AC =b. Find the firm's equilibrium level of output (where MC = AC) Calculate equilibrium price and thecorresponding values of AVC and AC. (Use the table to ider ify some values for AC.)46.910ACq* =P* =AVC* =ev ygua (AC* =bailk

The firm, has Tc = 90+2.5q2 P= 60-1/2Q

Firm änd Market In this exercise and the next, we compare a perfectly com etitive market to a monoj.oly. First, consider a perfectly competitive widget industry that h s adjusted to long-run equilibrium: Each firm earns zero economic profit, so there is no incen ve for firms either to enter or to exit. Each firm has chosen a (short run) plant size that allows it to achieve the minimum achievable long-run average cost, so there is no incentive for any firn either to enlarge cr to contract its scale of operation. Let Q = industry output and q = the output of any single firm. There are n identical firms: Q = nq Each firm's short-run total cost is: TC = 90 + 2.5q? Market demand (D) for the product is: P = 60 -- 12Q Write the equations of each firm's marginal cost, average v. riable cost, and average cost. MC = AVC = AC = b. Find the firm's equilibrium level of output (where MC = AC) Calculate equilibrium price and the corresponding values of AVC and AC. (Use the table to ider ify some values for AC.) 4 6. 9 10 AC q* = P* = AVC* = Vequa (n AC* =

Firm änd Market In this exercise and the next, we compare a perfectly com etitive market to a monoj.oly. First, consider a perfectly competitive widget industry that h s adjusted to long-run equilibrium: Each firm earns zero economic profit, so there is no incen ve for firms either to enter or to exit. Each firm has chosen a (short run) plant size that allows it to achieve the minimum achievable long-run average cost, so there is no incentive for any firn either to enlarge cr to contract its scale of operation. Let Q = industry output and q = the output of any single firm. There are n identical firms: Q = nq Each firm's short-run total cost is: TC = 90 + 2.5q? Market demand (D) for the product is: P = 60 -- 12Q Write the equations of each firm's marginal cost, average v. riable cost, and average cost. MC = AVC = AC = b. Find the firm's equilibrium level of output (where MC = AC) Calculate equilibrium price and the corresponding values of AVC and AC. (Use the table to ider ify some values for AC.) 4 6. 9 10 AC q* = P* = AVC* = Vequa (n AC* =

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter19: Externalities And Public Goods

Section: Chapter Questions

Problem 19.1P: A firm in a perfectly competitive industry has patented a newprocess for making widgets. The new...

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