How much is the long-run equilibrium price? how many firms, Ask an Expert

Economics

A perfectly competitive industry consists of a number of identical firms. Each firm has the following long-run marginal and average cost functions:

LRMC(q) = 40 - 12q + q2

LRAC(q) = 40 - 6q + (q2)/3

The market demand curve is given by Qd = 2200 - 100P.

(a) In the long-run equilibrium, how much would each firm produce?

(b) How much is the long-run equilibrium price?

(d) Plot two side-by-side graphs to illustrate the long-run equilibrium; one should show a typical firm in equilibiurm, the other should show the market in equilibrium.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M9473499

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