Given there are many firms selling phones in a marketplace, in a setting of perfect competition....

Given there are many firms selling phones in a marketplace, in a setting of perfect competition. Each individual ﬁrm faces costs C(q) = 6q2.

A. Derive a ﬁrm’s supply curve.

Now assume there are 360 ﬁrms selling phones in the same marketplace.
B. Derive the market supply curve.

Suppose the market demand curve is QD(p) = 1000 − 70p.
C. What are the equilibrium price and equilibrium quantity?

D. Graph the inverse demand and inverse supply curves for the market and
indicate the equilibrium price and quantity.

E. What are consumer and producer surplus?

Expert Solution

Rahul Sunny answered 2 years ago

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