2 . All firms in a market have the same long-run total cost function: C = 40...
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Question:
2. All firms in a market have the same long-run total cost function: C = 40q - 6q2 + (1/3)q3
Input prices do not change when the industry expands output.
(1). (7 pts) Calculate the market price and individual firm output (specific numbers) when the market is at the long-run competitive equilibrium.
(2). (5 pts) Market demand is Q = 2,200 - 100P. How many firms are in the market when the industry is at the long-run equilibrium? [Hint: # of firms = Q/q]
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