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I need help with c, d, and e, please! Suppose that the monthly demand for ladders is given by Q=22505P and long-run monthly total operating
I need help with c, d, and e, please!
Suppose that the monthly demand for ladders is given by Q=22505P and long-run monthly total operating costs of each ladder manufacturing firm is given by TC=0.5q25q+5000. a. Assuming a competitive equilibrium, what are the long-run equilibrium price, total market quantity, quantity per firm, profit per firm, and number of firms in the market? b. If demand for ladders shifted out to Q=32505P what would be the new long run equilibrium price, total market quantity, quantity per firm, and number of firms in the market (assume TC does not change)? c. Suppose that there have been a number of injuries due to malfunctioning ladders. Due to the accidents, the government mandates that each ladder must be inspected by a government trained inspector before it can be shipped from the manufacturing plant. The monthly supply of inspectors is given by QI=0.2w where w is the monthly cost of one inspector. One inspector can inspect 50 ladders per month. What are the long run equilibrium price, total market quantity, quantity per firm, and number of firms in the market if the monthly demand for ladders is Q=22505P ? d. If demand for ladders shifted out to Q=32505P what would be the new long run equilibrium price, total market quantity, quantity per firm, and number of firms in the market? e. Compare and contrast the long-run supply function in parts (a) and (b) with the long-run supply function in parts (c) and (d). Who captures the rents in part (d)? Explain (hint: compare the producer surplus for the ladder suppliers and the producer surplus for the inspectors)Step by Step Solution
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