Question
Consider a competitive industry with several identical firms. The long run average cost of a firm producing q units of output is given by AC(q)
Consider a competitive industry with several identical firms. The long run average
cost of a firm producing q units of output is given by
AC(q) = 10 6q + q2.
Suppose factor costs are constant and there is free entry and exit. Suppose market
demand is
QD(P) = 31 P.
where P denotes market price. Determine the number of firms in the industry
in the long run equilibrium.
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Operations Management Processes And Supply Chains
Authors: Lee Krajewski, Naresh Malhotra, Larry Ritzman
13th Global Edition
129240986X, 978-1292409863
