Question
A representative firm in a perfectly competitive, constant cost industry has a cost function T C = 100+4Q 2+ 100Q. (a) What are this firm
A representative firm in a perfectly competitive, constant cost industry has a cost function T C = 100+4Q 2+ 100Q.
(a) What are this firm fixed cost, variable cost and marginal cost?
(b) What is the long-run equilibrium price for this industry?
(c) If the market demand is Q = 1000 P , how many firms will operate in this long-run equilibrium?
(d) What is the most that this firm would be willing to pay for the exclusive right to use this new technology?
Step by Step Solution
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Step: 1
a Fixed cost FC is the constant term in the cost function which is 100 Variable cost VC is the term ...
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Microeconomics and Behavior
Authors: Robert Frank
9th edition
9780077723750, 78021693, 77723759, 978-0078021695
