Question

Question 27 A perfectly competitive industry is composed of 100 firms. Each firm has an identical short-run marginal cost function SMC = 5+10q (where q is the firm's level of output). If Q denotes industry output, what is the short-run market supply curve for output? a) Q = -50 + 10p if p > 5 and 0 if p 5 5 α Q = -5 + TOP p if p > 5 and 0 if p < 5 + α + p if p > 500 and 0 if p < 500 100 d) Q = 10p e) Q = P Question 28 [HARDER] Consider a firm operating in a perfectly competitive output market using capital (K) and labour (L) to produce output (q) using the production technology q = VKVI In the short run, the quantity of capital input is fixed at 25 units. Suppose the per-unit cost of labour is given by w=$50 and the per-unit cost of capital is given by r=$10. Find the firm's short-run supply curve. 120 a) a = p / b) p = 120 c) q = V60 d) q = =p e) None of the above.

Answer 1

we have, Sme=shloq e baiz, Darjinal cost for each firm 8 = 100 q pasket! outplet At time's Shast Reun Supply line Pame] p=sme / p=stloq aqt Supply curve I for each from Total market supply ten is : Q = loog 8-51 HQ = 101-56 Tot lop if Ro l 75 o i p< option @ is correct

Date. Page 4- + - २ _LD 2 3 01 ८२ q= Jason | १e Cost fenetion is : 01 + K sol flok ata) ()

Date Page 27 7469) - 292 ESD ME(q) = d Tc (9) I'Me (q) a uq Again, for short hien Supply function p=mc 2 P = 4q 1 paq rence option ② is correct Orr