The ethanol industry is perfectly competitive, and each producer has the long-run marginal cost function MC(Q) = 48 - 24Q +3Q². The corresponding long-run average cost function is AC(Q) = 48 12Q+Q². The market demand curve for ethanol is QD = 240 - 10P. - 1. What is one firm's inverse long-run supply curve with the minimum level of price for the firm to operate? 2. What is the optimal level of quantity produced by each firm in the long-run? 3. What is the long-run equilibrium price in this industry?

The ethanol industry is perfectly competitive, and each producer has the long-run marginal cost function MC(Q) = 48 - 24Q +3Q². The corresponding long-run average cost function is AC(Q) = 48 12Q+Q². The market demand curve for ethanol is QD = 240 - 10P. - 1. What is one firm's inverse long-run supply curve with the minimum level of price for the firm to operate? 2. What is the optimal level of quantity produced by each firm in the long-run? 3. What is the long-run equilibrium price in this industry?

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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