QUESTION 2: Consider a competitive market. There are X number of firms in this market. Every firm is facing the following set up: a. How does the number of firms in the industry, affect each firm's demand curve? Why? b. What will be the production in this market? What price will the companies charge? How much profit will firms make? c. What is the minimum number of firms in the market so that everyone is making losses? d. How many firms will exist in this market in the long-run?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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QUESTION 2: Consider a competitive market. There are X number of firms in this market. Every firm is facing the following set up: a. How does the number of firms in the industry, affect each firm's demand curve? Why? b. What will be the production in this market? What price will the companies charge? How much profit will firms make? c. What is the minimum number of firms in the market so that everyone is making losses? d. How many firms will exist in this market in the long-run?
540
Demand: Q
1.25P
3X
144
Marginal Revenue: MR =
- 1.60Q
Total Cost: TC = 344 + 0.5Q2
Marginal Cost: MC = Q
Transcribed Image Text:540 Demand: Q 1.25P 3X 144 Marginal Revenue: MR = - 1.60Q Total Cost: TC = 344 + 0.5Q2 Marginal Cost: MC = Q
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