Question
The demand and total cost functions for a monopolistically competitive market are: Q(P) = 300/N - P, where N = number of firms TC(Q) =
The demand and total cost functions for a monopolistically competitive market are:
Q(P) = 300/N - P, where N = number of firms
TC(Q) = 50 + Q2
There are currently three firms in this market and they are in a short run equilibrium.
a) What are the profit maximising QMand PMfor each firm? [5 points]
b) What is each firm's profitM? [5 points]
c) In the long run, how many firms are in the market (round to the nearest integer)? [10 points]
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International Economics Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc Melitz
11th Edition
134519574, 9780134521046 , 978-0134519579
