Suppose you are given the following information about a particular industry: QD = 3600 – 200P Market demand QS = 1000P Market supply q? C(q) = 595 + 200 Firm total cost function 2q MC(q) = 200 Firm marginal cost function. Assume that all firms are identical and that the market is characterized by perfect competition. Find the equilibrium price, the equilibrium quantity, the output supplied by the firm, and the profit of each firm. The equilibrium price is $. (Enter your response rounded to two decimal places.)

Suppose you are given the following information about a particular industry: QD = 3600 – 200P Market demand QS = 1000P Market supply q? C(q) = 595 + 200 Firm total cost function 2q MC(q) = 200 Firm marginal cost function. Assume that all firms are identical and that the market is characterized by perfect competition. Find the equilibrium price, the equilibrium quantity, the output supplied by the firm, and the profit of each firm. The equilibrium price is $. (Enter your response rounded to two decimal places.)

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter9: Market Structure And Long-run Equilibrium

Section: Chapter Questions

Problem 1MC

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Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + 1/2q2 Marginal cost: MC = q Where q is an individual firm’s quantity produced. The market demand curve for the product is: Demand: QD = 120 – P Where P is the price and Q is the total quantity of the good. Currently there are 9 firms in the market. What is each firm’s fixed cost? What is its variable cost? Give the equation for average total cost. Graph the average-total-cost curve and the marginal-cost curve for q from 5 to 15. At what quantity is the average-total-cost curve at its minimum? What is the marginal cost and average total cost at that quantity? Give the equation for each firm’s supply curve. Give the equation for the market supply curve for the short run in which the number of firms is fixed. What is the equilibrium price and quantity for the market in the short run? In this equilibrium, how much does each firm produce? Calculate the firm’s profit and loss. Do firms have…
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Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + 1/2q2 Marginal cost: MC = q where q is an individual firm's quantity produced. The market demand curve for this product is Demand: QD where P is the price and Q is the total quantity of the good. Currently, there are 9 firms in the market. = 120 – P а. What is each firm’s fixed cost? What is its variable cost? Give the equation for average total cost. b. Graph average-total-cost curve and the marginal-cost curve for q from 5 to 15. At what quantity is average-total-cost curve at its minimum? What is marginal cost and average total cost at that quantity? с. Give the equation for each firm's supply curve. d. Give the equation for the market supply curve for the short run in which the number of firms is fixed. е. What is the equilibrium price and quantity for this market in the short run? In this equilibrium, how much does each firm produce? Calculate each firm's profit or ^ loss. Is there…
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. How much is output supplied by each firm, and how much profit does each firm make in the short run? Would you expect to see entry into or exit from the industry in the long run? Explain. 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.