Question

Assume that the market for beaver tails is competitive in Ottawa, so each beaver tail seller is a price-taker. Each establishment faces the same daily cost function $C(q) = 200 + 7q + q^2/2$. If the market price is 31, how many units does the firm optimally produce? Should the firm shut down in the short run or in the long run? \begin{itemize} \item Short-run competitive equilibrium If there are $n = 12$ identical firms in the short run, what is market supply at a price of 31? What is the general market supply in terms of the price? Below which price will firms shut down in the short run? \item Long-run competitive equilibrium Below what price will firms shut down in the long run? What is the market price and what quantity will be sold by each firm? How many firms will there be in the long run if the demand function is $D(p) = 394 - 2p$? \end{itemize}

          Assume that the market for beaver tails is competitive in Ottawa, so each beaver tail seller is a price-taker. Each establishment faces the same daily cost function

$C(q) = 200 + 7q + q^2/2$.

If the market price is 31, how many units does the firm optimally produce? Should the firm shut down in the short run or in the long run?

\begin{itemize}
    \item Short-run competitive equilibrium
    If there are $n = 12$ identical firms in the short run, what is market supply at a price of 31? What is the general market supply in terms of the price? Below which price will firms shut down in the short run?
    \item Long-run competitive equilibrium
    Below what price will firms shut down in the long run? What is the market price and what quantity will be sold by each firm? How many firms will there be in the long run if the demand function is $D(p) = 394 - 2p$?
\end{itemize}

Assume that the market for beaver tails is competitive in Ottawa, so each beaver tail seller is a price-taker. Each establishment faces the same daily cost function

C(q) = 200 + 7q + q^2/2.

If the market price is 31, how many units does the firm optimally produce? Should the firm shut down in the short run or in the long run?

* Short-run competitive equilibrium
If there are n = 12 identical firms in the short run, what is market supply at a price of 31? What is the general market supply in terms of the price? Below which price will firms shut down in the short run?

* Long-run competitive equilibrium
Below what price will firms shut down in the long run? What is the market price and what quantity will be sold by each firm? How many firms will there be in the long run if the demand function is D(p) = 394 - 2p?

Added by Michael P.

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