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A market is served by two firms with costsC1= 10 andC2= 7. The inverse demand function isgivenbyP=1803Q. (i) Calculate the equilibrium market price and aggregate
- A market is served by two firms with costsC1= 10 andC2= 7. The inverse demand function isgivenbyP=1803Q.
- (i) Calculate the equilibrium market price and aggregate supply in the market.
- (ii) Find the outputs and profits earned by each of the firms.
- (iii) What will happen if because of a shock to the input market, each firm's costs go up by 10%? Calculate the equilibrium market price and aggregate supply in the market under this input market supply shock situation.
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Macroeconomics
Authors: Stephen d. Williamson
5th Canadian edition
133847144, 9780134604794 , 978-0133847147
