Suppose a firm operating in a perfectly competitive industry has costs in the short run given by: SRTC = 8 + ½q2 and therefore MC = q. If the minimum point of the short run ATC curve for all firms (existing and potential) is also the minimum point of the long run average cost curve (LRAC), calculate the long-run equilibrium price, market quantity, and firm quantity. What is the long-run equilibrium number of firms in the industry?
Suppose a firm operating in a perfectly competitive industry has costs in the short run given by: SRTC = 8 + ½q2 and therefore MC = q. If the minimum point of the short run ATC curve for all firms (existing and potential) is also the minimum point of the long run average cost curve (LRAC), calculate the long-run equilibrium price, market quantity, and firm quantity. What is the long-run equilibrium number of firms in the industry?
Chapter7: Perefect Competition
Section: Chapter Questions
Problem 5SQP
Related questions
Question
Suppose a firm operating in a
If the minimum point of the short run
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
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.Recommended textbooks for you
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning