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A firm operating in a perfectly competitive market has the following total cost function: TC=0.4Q2+40. Its...

A firm operating in a perfectly competitive market has the following total cost function: TC=0.4Q2+40. Its marginal cost function is given by: MC=0.8Q. There are 20 identical firms in the short-run in the market. In addition, the demand function is given by: Q=300-5P

a) Find the Supply Function for the Firm in the short-run

b) What is the equilibrium price and quantity in the market in the short-run?

c) How much does each of the 20 firms produce in the short-run?

d) How much profits does each firm make in the short-run? Will there be entry or exit in the long-run?

e) If ATC is minimized at Q=10, what is the price of the product in thelong-run?

f) How many firms are in the market in the long-run?

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
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