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17th Assignment Consider a representative firm with total costs of TC=8+Q? (and a marginal cost of Q, MC=Q). The market demand curve is given by
17th Assignment
Consider a representative firm with total costs of TC=8+Q? (and a marginal cost of Q, MC=Q). The market demand curve is given by P=16-Q and the starting market price is
- Graph the starting scenario using comparative statics.
- Calculate any profit or loss. Why is this not a long run equilibrium?
- What happens in order to transition to the long run?
- Graph the long run equilibrium using comparative statics.
- How many firms are in the market in the long run?
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