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Suppose there is a monopolistically competitive market with n identical firms, such that each firm produces the same quantity, q. Further, the market is in
Suppose there is a monopolistically competitive market with n identical firms, such that each firm produces the same quantity, q. Further, the market is in the monopolistically competitive long-run equilibrium. You are given the following: Inverse market demand: P = 10 - Q Total market output: Q = nx q Marginal revenue: MR = 10 -(n + 1) x q Total cost: C(q) = 5+ q2 Marginal cost: MC = 2x q In long-run equilibrium, each firm earns profit. In long-run equilibrium, the number of firms, n, is , and each firm produces unit(s) of output at an equilibrium price of $ . (Read carefully. The number of firms must be an integer. Round output to three decimal places and round the price to the nearest penny.)
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