Question consider a perfectly competitive market where each, Ask an Expert

Economics

Question: Consider a perfectly competitive market where each firm has the short-run cost function

C(q) = a + bq + cq²

for some positive constants a, b, and c.

(1) Show that firms shut down in the short-run if p < b.

(2) Show that when p > b + 2√ac, more firms will enter in the long-run.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M92587801

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