(Answered) New firm in perfect competitionthe market demand and supply

Engineering

New Firm in Perfect Competition

The market demand and supply curves in a perfectly competitive industry are given by: P = 24 - Q/1,000 and P = -4 + Q/750.

Complete the following questions.

b) Calculate the equilibrium price and output in this industry.

Equilibrium price

= $

Equilibrium output

c) Now assume that an additional firm is considering entering. This firm has a short-run MC curve defined by MC = 7 + 0.5q, where q is the firm's output. If this firm enters the industry, what output should it produce? (Hint: It will set P = MC.)

Output

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