The market for drones is perfectly competitive. Assume for simplicity that fractions of everything, including firms, is possible. We have identical firms, each with a Total Cost curve of TC=358+q^2 and Marginal Cost curve MC=2q. Market demand is Q=600-2P. If the Marginal Cost for every firm decreases by $10 at every quantity, what is the short-run market price? Hint: first find the number of firms by solving for the original LR equilibrium.

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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?