The AC and MC values for firms in a perfectly competitive industry are as follows: Q AC MC 1 12 2 8 20 3 12 4 16 36 5 20 8 24 52 7 28 60 8 32 68 36 76 Suppose that there are 70 firms operating in the industry. Using the MC curve, find out how much output in total is delivered to the market at each price (you only need to consider prices equal to the MC values above). Now assume that the market demand curve is given by p 305 .5Q, where p is the market price. For purposes of this problem, it is helpful to "invert" the demand curve, writing Q in terms of p. This gives Q=610 2p a) Verify that when p 44 the market has O A. excess supply O B. excess demand equal to units. When p 68, the market has O A. excess demand O B. excess supply equal to units. and profit per firm equals(don't include S signs in b) Find the market equilibrium price, and compute output per firm and profit per firm at this price (you need only check prices corresponding to the above MC values. The equilibrium price is p output per firm is Q= any of your answers).

The AC and MC values for firms in a perfectly competitive industry are as follows: Q AC MC 1 12 2 8 20 3 12 4 16 36 5 20 8 24 52 7 28 60 8 32 68 36 76 Suppose that there are 70 firms operating in the industry. Using the MC curve, find out how much output in total is delivered to the market at each price (you only need to consider prices equal to the MC values above). Now assume that the market demand curve is given by p 305 .5Q, where p is the market price. For purposes of this problem, it is helpful to "invert" the demand curve, writing Q in terms of p. This gives Q=610 2p a) Verify that when p 44 the market has O A. excess supply O B. excess demand equal to units. When p 68, the market has O A. excess demand O B. excess supply equal to units. and profit per firm equals(don't include S signs in b) Find the market equilibrium price, and compute output per firm and profit per firm at this price (you need only check prices corresponding to the above MC values. The equilibrium price is p output per firm is Q= any of your answers).

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter10: Prices, Output, And Strategy: Pure And Monopolistic Competition

Section: Chapter Questions

Problem 6E

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