Question

	Product Price Quantity Supplied Profit (+) or Loss (-) $72 8 $246.00 52 7 $104.00 45 6 $60.00 28 5 -$35.00 22 Shutdown 15 Shutdown

Assume there are 500 identical firms in this industry, that they have identical cost data as the firm above, and that the industry demand schedule is as follows:

Product Price	Quantity Demanded	Quantity Supplied
$72	2500
52	3500
45	4000
28	5200
22	5900
15	6700

(e) What will the equilibrium price be?

(f) What will the equilibrium output for each firm be?

(g) What will profit or loss be per unit?

(h) What will profit or loss be per firm?

Answer 1

Product Price	Quantity Demanded	Individual Quantity	Quantity Supplied=500*individual quantity
72	2500	8	4000
52	3500	7	3500
45	4000	6	3000
28	5200	5	2500
22	5900	Shutdown	Shutdown
15	6700	Shutdown	Shutdown

e)

Equilibrium price will be where demand equals supply this is true at a price of $52.

f)

Equilibrium quantity will be where demand equals supply at a total quantity of 3500 and individual quantity of 7 units.

g)

Profit per unit will be 104/7=14.85

h)

Profit per firm will be $104.