Question
1-)Suppose there are 20 competitive firms in a market. The supply curve of each firm is q = 2p. The market demand is Q =
1-)Suppose there are 20 competitive firms in a market. The supply curve of each firm is q = 2p. The market
demand is Q = 200 - 2p. What is the residual demand curve facing a typical firm?
2) Suppose a firm has the following total cost function: TC = 100 + 4q2. What is the minimum price necessary for
the firm to earn profit? Below what price will the firm shut down in the short run?
3) Even if two competitive firms in the same market have different production technologies, they will each earn
long-run zero profits. Why?
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Global Business Today
Authors: Charles Hill
9th Edition
1259299201, 9781259299209
