In a perfectly competitive market, industry demand is given by Q=1,000 20P. The typical firm's average cost

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In a perfectly competitive market, industry demand is given by Q=1,000 20P. The typical firm's average cost is AC300/Q+Q/3.

a. Confirm that Qmin 30.

(Hint: Set AC equal to MC.) What is ACmin?

b. Suppose 10 firms serve the market. Find the individual firm's supply curve. Find the market supply curve. Set market supply equal to market demand to determine the competitive price and output. What is the typical firm's profit?

c. Determine the long-run, zero-profit equilibrium. How many firms will serve the market?

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Managerial Economics

ISBN: 9781119554912

5th Edition

Authors: William F. Samuelson, Stephen G. Marks

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Question Posted: Oct 08, 2024 10:00 AM

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In a perfectly competitive market, industry demand is given by Q=1,000 20P. The typical firm's average cost

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Managerial Economics

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