Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider a perfectly competitive market in which each firm's short-run total cost function is C = 64 + 15q + q, where q is the

image text in transcribed
Consider a perfectly competitive market in which each firm's short-run total cost function is C = 64 + 15q + q", where q is the number of units of output produced. The associated marginal cost curve is MC = 15 + 2q. In the short run each firm is willing to supply a positive amount of output at any price above $ 15 . (Enter your response as a real number rounded to two decimal places.) If the market price is $27, each firm will produce 6.0 units in the short-run. (Enter your response as a real number rounded to one decimal place.) Each firm earns a profit of $ - 28.00 . (Enter your response as a real number rounded to two decimal places, and use a negative sign if the firm has a loss rather than a profit.) In the long run, firms will exit the industry. Suppose the short-run cost function given above [C = 64 + 15q + q"] is the one that all firms would use in the long-run, because the corresponding SAC curve is tangent to the LAC curve at the minimum point on the LAC curve. In the long run, each firm will produce units. (Enter your response as a real number rounded to one decimal place.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Economics questions