Suppose a competitive market has many identical firms. Each firm has a cost function of C = 16 + q^2. The market demand function is Q = 24 - p. Find the following: [5 pts. each] a. Long-run equilibrium market price and market quantity b. Quantity of output per firm and the number of firms
Added by Katherine R.
Step 1
Given: Cost function, C = 16 + q^2 Market demand function, Q = 24 - p To find the long-run equilibrium market price, we need to find the minimum average total cost. Average total cost (ATC) is given by ATC = C/q = (16 + q^2)/q = 16/q + q. Taking the first-order Show more…
Show all steps
Your feedback will help us improve your experience
Manasvee Singh and 93 other Microeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
Each of the 8 firms in a competitive market has a cost function of $C=25+q^{2} .$ The market demand function is $Q=360-p .$ Determine the equilibrium price, quantity per firm, and market quantity. A
Competitive Firms and Markets
Competition in the Short Run
A market with demand Q = 16p^(-2) is supplied by a monopoly with costs C(Q) = 6 + Q^(2)/8. Calculate the equilibrium price, output, and monopoly profits. What would be the equilibrium if the market were supplied competitively by firms, and each individual firm had the same costs?
Andrew D.
You are the manager of a monopolistically competitive firm, and your demand and cost functions are given by Q = 36 – 4P and C(Q) = 124 – 16Q + Q2. [NOTE à MC(Q) = -16+2Q] a) Find the inverse demand function for your firm’s product. b) Determine the profit-maximizing level of production. c) Calculate your firm’s profits level.
Shagufi I.
Recommended Textbooks
Principles of Economics
Principles of Microeconomics for AP® Courses
Economics
Transcript
Watch the video solution with this free unlock.
EMAIL
PASSWORD