Question
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 = n x q
Marginal revenue: MR = 10 - (n + 1) x q
Total cost: C(q) = 5+q
Marginal cost: MC = 2 x q
In long-run equilibrium, each firm earns zero economic profit. ,
In the 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 In long-run equilibrium, the number of firms, n, is to the nearest penny.)
Please solve and explain in details your solution. Thank you.
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