The industry for hockey pucks is perfectly competitive. All firms are identical with a coststructure that...

The industry for hockey pucks is perfectly competitive. All firms are identical with a coststructure that is independent of the number of firms in the industry. Each firm has a long-run average cost curve that has its minimum of $2.00 at a quantity of 2500 pucks. The demand for pucks is given by Q = 1,400,000 - 400,000P. a) Find long-run equilibrium price and output in the hockey puck market. b) What is the long-run equilibrium production of each firm? How many of them are there in the long run? What are the profits of each firm? c) Suppose that the expansion of the NHL into the sunbelt increases the demand for hockey pucks by 200,000 at every price. Derive the new long-run equilibrium price, market quantity, quantity supplied by each firm, number of firms, and profits per firm.

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Rahul Sunny answered 1 year ago

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