Question
The market demand for a type of carpet known as KP-7 has been estimated P =40 - 0.25Q, where P is price (S/yard) and Q
The market demand for a type of carpet known as KP-7 has been estimated P =40 - 0.25Q, where P is price (S/yard) and Q is rate of sales (hundreds of yards per month).
The market supply is expressed as: P = 5.0 + 0.05Q.
A typical firm in this market has a total cost function ghat as:
C = 100 - 20.0q + 2.0q 2
a. Determine the equilibrium market output rate and price.
b. Determine the output rate for a typical firm.
c. Determine the rate of profit (or loss) earned by the typical firm.
Step by Step Solution
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Step: 1
a When Demand meets Supply for equilibrium Price and Quan...
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Step: 2
Step: 3
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Microeconomics
Authors: Douglas Bernheim, Michael Whinston
2nd edition
73375853, 978-0073375854
