Question
Hi need the answers for BBA Assignment 2 is it possible? The market for study desks is characterized by perfect competition. Firms and consumers are
Hi need the answers for BBA Assignment 2 is it possible?
The market for study desks is characterized by perfect competition. Firms and consumers are
price takers and in the long run there is free entry and exit of firms in this industry. All firms
are identical in terms of their technological capabilities. Thus the cost function as given below
for a representative firm can be assumed to be the cost function faced by each firm in the
industry. The total cost and marginal cost functions for the representative firm are given by
the following equations:
TC = 2qs^2+ 5qs + 50
MC = 4qs + 5
Suppose that the market demand is given by:
PD = 1025 - 2QD
Note: Q represents market values and q represents firm values. The two are different.
Question 1: At the new long-run equilibrium, how many firms will be in the industry?
Select one:
a.32
b.45
c.150
d.230
Qest 2 At the new long-run equilibrium, what will be the output of each representative firm in
the industry?
Select one:
a.4
b.5
c.3
d.2
Determine the equation for average total cost for the firm
Select one:
a.2qs + 2 + 50/qs
b.2qs + 5 + 50/qs
c.3qs + 5 + 50/qs
d.None of the above
Determine the market quantity Q from the market demand curve, given
that we know the above calculated market price.
Select one:
a.23
b.504
c.34
d.89
In the long-run given this technological advance, how many firms will there be in the
industry?
Select one:
a.34
b.84
c.32
d.56
Now suppose that the number of students increases such that the market demand curve for
study desks shifts out and is given by,
PD = 1525 - 2QD . What will be the new long-run equilibrium price in this industry?
Select one:
a.25
b.34
c.23
d.45
Now, consider another scenario where technology advancement changes the cost functions of
each representative firm. The market demand is still the original one (before the increase in
the number of students). The new cost functions are: TC = qs^2+5qs + 36
MC = 2qs + 5 What will be the new equilibrium price?
Select one:
a.17
b.4
c.2
d.6
What is the long-run equilibrium price in this market?
Select one:
a.12
b.14
c.25
d.None of the above
What is the long-run output of each representative firm in this industry?
Select one:
a.5
b.3
c.6
d.7
When this industry is in long-run equilibrium, how many firms are in the industry?
Select one:
a.3
b.80
c.40
d.100
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