Question
Suppose the headphone industry is perfectly competitive and every firm has the following cost structure: MC= 50 + 6q ATC = 50 + 3q +
Suppose the headphone industry is perfectly competitive and every firm has the following cost structure:
- MC= 50 + 6q
- ATC = 50 + 3q + 675/q
- AFC = 675/q
whereqis the number of headphone produced by a typical firm in a year.Assume the ATC and MC curves are the same in the short-run and long-run.The current market price is $74 per headphone.
Answer the following questions (4points each):
- What is the profit-maximizing quantity sold at the current market price by each firm?
- What is the long-run market price of headphones?
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Statistics The Art And Science Of Learning From Data
Authors: Alan Agresti, Christine A. Franklin
3rd Edition
9780321849281, 321755944, 321849280, 978-0321755940
