HomeworkLib
Question

Long Run Equilibrium 4. Suppose each firm in a perfectly competitive industry has the same long...

Long Run Equilibrium

4. Suppose each firm in a perfectly competitive industry has the same long run total cost function T C(q) = 16+q^2 . The market demand curve is QD = 100−P.

(a) What 3 equations define a Long Run Perfectly Competitive Equilibrium?

(b) How much quantity q ∗ does each firm produce in Long Run Perfectly Competitive Equilibrium?

(c) What is the market price P ∗ in this equilibrium?

(d) Find the market quantity Q∗ . (

e) What is the equilibrium number of firms n ∗ in this industry?

(f) At the market equilibrium, how much profit does each firm make?

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

0 0
Add a comment
Know the answer?
Add Answer to:
Long Run Equilibrium 4. Suppose each firm in a perfectly competitive industry has the same long...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 1. Each firm in a perfectly competitive industry has the long-run total cost function c(y) =...

    1. Each firm in a perfectly competitive industry has the long-run total cost function c(y) = 3y - (y^2/3) + (y^3/27) Demand is given by the inverse demand curve p = 15 - (Qd/600). Calculate, for the long-run equilibrium, a. The price b.The market quantity c. The number of firms d. The profit for each firm

  • 1. (18pts) Suppose there are 100 firms in a perfectly competitive industry. Short run marginal costs...

    1. (18pts) Suppose there are 100 firms in a perfectly competitive industry. Short run marginal costs for each firm are given by SMC = q + 2 and market demand is given by Qd = 1000-20P (5pts) Calculate the short run equilibrium price and quantity for each firm.. b. (3pts) Suppose each firm has a U-shaped, long-run average cost curve that reaches a minimum of $10. Calculate the long run equilibrium price and the total industry output.. (4pts) What is...

  • (a) All firms in a perfectly competitive industry face the same long-run average cost curve, AC...

    (a) All firms in a perfectly competitive industry face the same long-run average cost curve, AC = 0.05q – 5 + 500/q, and the same long-run marginal cost curve given by MC = 0.1q – 5. The market demand for the product of these firms is QD = 100,000 – 10,000P. i.Calculate the equilibrium price and quantity. ii.Assuming the market is in long-run equilibrium, how many firms will be on the market? (b) Suppose the demand for cotton T-shirts is...

  • Answer just part b ) All firms in a perfectly competitive industry face the same long-run...

    Answer just part b ) All firms in a perfectly competitive industry face the same long-run average cost curve, AC = 0.05q – 5 + 500/q, and the same long-run marginal cost curve given by MC = 0.1q – 5. The market demand for the product of these firms is QD = 100,000 – 10,000P. i. Calculate the equilibrium price and quantity. ii. Assuming the market is in long-run equilibrium, how many firms will be on the market? (b) Suppose...

  • Name Each producer in this perfectly competitive industry has a long-run MC function of: MC-40-120+ and...

    Name Each producer in this perfectly competitive industry has a long-run MC function of: MC-40-120+ and long-run ATC function: ATC 40-60 (Q)/3. The market demand curve is: D-2200-100P a. What is the long-run equilibrium price in this industry? b. At this long-run equilibrium price, what is the quantity produced by an individual firm? c. How many firms are there in this industry (in the long-run)?

  • Each firm in a perfectly competitive market has long run average cost represented as AC(q) =...

    Each firm in a perfectly competitive market has long run average cost represented as AC(q) = 100q- 10+100/q. Long run marginal cost is MC=200q-10. The market demand is Qd = 2150-5P.    Find the long run equilibrium output per firm, q*, the long run equilibrium price, P*, and the number of firms in the industry, n*. P = 190; Q = 1200; q =1 , n = 1200

  • 9. The long-run supply curve of a perfectly competitive firm is given by a horizontal line...

    9. The long-run supply curve of a perfectly competitive firm is given by a horizontal line placed at P = 3 PLN (in a graph where the quantity and price are measured on the X and Y axes, respectively). The market demand is described by QD = 150-5P. a. What is the amount of output produced by the whole industry in the long-run equilibrium? b. Assuming that firms are identical and obtain the minimum average cost for the quantity of...

  • 1. (20p) Suppose that, in a perfectly competitive industry, the technology for making the product (by...

    1. (20p) Suppose that, in a perfectly competitive industry, the technology for making the product (by any single firm) has the total cost function c(q) = 200 + 4q+ Barriers to entry and exit the market are low and an unlimited number of firms could enter this industry, all with the same total cost function. (a) Compute the long-run equilibrium price in this industry, as well as the amount of output each firm would produce at this price. Explain the...

  • In a perfectly competitive market, a firm has the following short-run total cost function: C(q)=16+4q+q2 The...

    In a perfectly competitive market, a firm has the following short-run total cost function: C(q)=16+4q+q2 The market demand is Q(p)=220-p a. Show that marginal cost curve passes through the minimum point of average cost curve. Draw a figure to show it. b. Find the firm’s individual short-run supply function. Draw it on the above figure. For the following questions, suppose that there are currently 10 identical firms in this market. c. What is the market supply curve? What are the...

  • Short-run Equilibrium: Bumper sticker firms produce bumper stickers in a perfectly competitive market. Each identical firm...

    Short-run Equilibrium: Bumper sticker firms produce bumper stickers in a perfectly competitive market. Each identical firm has a short-run total cost function equal to: STC (Q) = 3 + 2q + 2Q2. Suppose that there are 100 firms, and the market demand is D(P) = 100 - 5P where D(P) is the quantity consumed in the market when the market price is P. 1. What is the short-run equilibrium price? 2. How much does each firm produce? 3. Are they...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT