Question

In: Economics

Consider a perfectly competitive industry in which each firm has a cost curve given by C...

Consider a perfectly competitive industry in which each firm has a cost curve given by C = 400 + 100q + q2. (You may assume this is both the short-run and the long-run cost curve.) Currently there are 60 firms, and the market demand is given by Q = 6000 – 30p.

a. Calculate the short-run total market equilibrium quantity (Q): _____

b. Calculate the long-run market equilibrium price: _____

c. Calculate the number of firms in long-run equilibrium: _____

Solutions

Expert Solution

since the number of firms in the market is 60 thus, the total market equilibrium quantity in the short run is (60*q) = 60x25 = 1500 units.
Hence, the required short-run total market equilibrium quantity (Q) is 1500 units

Rahul Sunny answered 2 years ago
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