Question
13. Suppose a representative firm in a perfectly competitive industry has the following total cost of production in the short run: TC=Q3 -30Q2+250Q. a. What
13. Suppose a representative firm in a perfectly competitive industry has the following total cost of production in the short run: TC=Q3 -30Q2+250Q.
a. What will be the long run equilibrium quantity for the firm? What will be the long run equilibrium price in this industry?
b. Let the industry demand be given by QD=1300-6P. How many firms will be active in the long-run equilibrium?
c. Suppose the firm faces a positive demand shock that increases the industry demand to QD=1625-4P. Describe how the industry would respond and calculate the change in the number of firms.
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Microeconomics
Authors: Robert Pindyck, Daniel Rubinfeld
8th edition
978-0132870436, 132870436, 013285712X, 978-0133371178, 133371174, 978-0132857123
