Calculate the price below which the firm will not produce, Ask an Expert

Economics

Newsprint (the paper used for newspapers) is produced in a perfectly competitive industry. Each identical firm has a variable cost VC(q) = 40q + 1⁄2q2, with an associated marginal cost if MC(q) = 40+q. Each firm has an unavoidable fixed cost of 50.

a. find out the price below which the firm will not produce any output in the short-run.

b. Assume there are 12 identical firms in the industry. Determine the market supply curve.

c. Now suppose the market demand curve for newsprint is Q = 360 - 2p, where Q is the quantity demanded in the
market when the price is p. What is the short-run equilibrium price? What is the short-run equilibrium market
quantity?

d. How much will each firm produce at this equilibrium price? How much profits will they make?

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M946277

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