The long-run cost function of the representative firm in an industry is C(q)=q3/3-2q2 +10q and the market demand function is D(p)=3600-120p. Determine the quantity supplied by the representative firm, the market price, the total sales, and the number of firms in the long-run industry equilibrium.

The long-run cost function of the representative firm in an industry is C(q)=q3/3-2q2 +10q and the market demand function is D(p)=3600-120p. Determine the quantity supplied by the representative firm, the market price, the total sales, and the number of firms in the long-run industry equilibrium.

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

Chapter2: Fundamental Economic Concepts

Section: Chapter Questions

Problem 2E

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Accounting and Economic Profit analysis

One comes across the concept of Profits in the context of business and in analyzing the results of business activity. Profits of a business can be accounting profits, and they can also be economic profits. So how does one understand the concept of accounting versus economic profits?

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Economics

(a) The long-run cost function of the representative firm in an industry is C(q)=q³/3-2q² +10q and the market demand function is D(p)=3600-120p. Determine the quantity supplied by the representative firm, the market price, the total sales, and the number of firms in the long-run industry equilibrium.

(b) In a closed economy, the demand and the supply function for a given commodity are Q_D =150-2p and Q_S =- 50+2p, respectively. Suppose that the government provides a subsidy equal to 12 Euros per unit of quantity supplied. Determine the price the producers receive, the price the consumers pay, the total sales, and the cost to the taxpayers in the industry equilibrium with the subsidy.

Identification and sourcing products or services to deliver to the marketplace and to promote them. These functions include product management, selling, pricing, marketing information, distribution, promotion, and financing.

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