Myeconlab With Pearson Etext -- Access Card -- For Microeconomics
9th Edition
ISBN: 9780134143071
Author: PINDYCK, Robert, Rubinfeld, Daniel
Publisher: PEARSON
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Question
Chapter 8, Problem 10E
(a)
To determine
The
(b)
To determine
Identify the effect of entry and exit of the firms in the long run on the
(c)
To determine
Level of output that sells at the lowest price level.
(d)
To determine
Identify the lowest price level in the short run.
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Suppose you are given the following information about a particular industry:
QD = 6500 – 100P Market Demand
QS = 1200P Market Supply
TC(q) = 722 + q2/200 Individual firm’s total cost function
MC(q) = q/100 Individual firm’s marginal cost function
Assume that all firms are identical and that the market is characterized by perfect competition.
Find an individual firm’s supply curve.
How many firms are there currently in the market?
Find the equilibrium price and equilibrium market quantity.
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What effect will entry or exit have on the market equilibrium? Find the long-run equilibrium price, the number of firms, and the amount of output each firm produces in the long run.
Suppose you are given the following information about a particular industry
Q(d) = 6500 - 100P Market Demand
Q(s) = 1200P Market Supply
C(q) = 722 + q^2/200 Firm total cost function
MC(q) = 2q/200 Firm marginal cost function
Assume that all firms in this industry are identical and that the market is characterized as perfect competition.
Find the equilibrium price, the equilibrium quantity, the output supplied by the firm, and the profit of each firm.
Would you expect to see entry into or exit from the industry in the long run? What effect would this entry or exit have on market equilibrium?
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What is the lowest price at which each firm would sell its output in the short run? Is profit positive, negative, or zero at this price?
Consider a competitive industry with a market demand curve of P = 120 - Q, where P is market price and Q
is the quantity demanded in the market. In the short run there are 4 firms in the industry, and each firm has
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Chapter 8 Solutions
Myeconlab With Pearson Etext -- Access Card -- For Microeconomics
Ch. 8 - Prob. 1RQCh. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Prob. 4RQCh. 8 - Prob. 5RQCh. 8 - Prob. 6RQCh. 8 - Prob. 7RQCh. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQ
Ch. 8 - Prob. 11RQCh. 8 - Prob. 12RQCh. 8 - Prob. 13RQCh. 8 - Prob. 14RQCh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Suppose you are the manager of a watchmaking firm...Ch. 8 - Prob. 5ECh. 8 - Prob. 6ECh. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - A sales tax of 1 per unit of output is placed on a...Ch. 8 - Prob. 15E
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