Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Perfectly Competitive market vs duopoly market Suppose the daily demand function of pizza in St Catherines Q^d=2175-5p. For 1 pizza store, the variable cost of

Perfectly Competitive market vs duopoly market Suppose the daily demand function of pizza in St Catherines Q^d=2175-5p. For 1 pizza store, the variable cost of making Qpizza per day is C(q)=0.2q^2 - 5q there is a 2000$ fixed cost. There is free entry in the long run

  1. What is the long run market equilibrium price and quantity in this market? How many firms in the market
  2. If the marginal cost decreased by 2$ per pizza what is the new short run market equilibrium price and quantity.
  3. Draw graphs to show the short run and the long run responses of both an individual firm and the market in part b.

Now assume the market demand function does not change, consider duopoly market in which the marginal cost of each firm is 35.

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

Managerial Economics And Strategy

Authors: Jeffrey M. Perloff, James A. Brander

3rd Edition

0134899709, 978-0134899701

More Books

Students also viewed these Economics questions

Question

Always have the dignity of the other or others as a backdrop.

Answered: 1 week ago