00:01
So this is perfect competition in the long run.
00:31
So at market equilibrium, this is when demand is equal to supply.
00:35
So where they cross, equilibrium price is 80.
00:49
And then they cross at the quantity 800.
01:09
What is the optimal quantity that the firm should produce? so the price of 80, we're going to look at the marginal cost curve.
01:50
We have average total cost and marginal cost.
01:58
Our equilibrium price is 80.
02:02
And then on the marginal cost curve, our quantity is 10.
02:12
Also note, this is where marginal cost intersects with the lowest point on average total cost.
02:19
What type of profit will this firm make? so we need the average total cost of this quantity.
02:33
The quantity of 10, average total cost is 80, which is equal to marginal cost.
02:59
So the profit that is made by each firm be the price minus average total cost times the quantity.
03:20
The price is 80, average total cost is 80.
03:23
So that ends up being zero.
03:27
Each firm makes a normal profit.
03:43
So basically they cover their costs.
03:50
So the number of firms would be the quantity, based off of market equilibrium, divided by the quantity that is being produced.
04:39
So there are 80 firms in the market.
04:48
For the next one, the demand curve shifts 600 units to the right.
04:57
And then we want the new equilibrium price.
05:13
So now the new price becomes 110.
05:27
So now we want the quantity at this price.
05:31
So we need to look at marginal cost and average total cost...