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The tables (below) show the willingness to pay by three (competitive) consumers for additional units of some good, and the marginal costs of three (competitive)
The tables (below) show the willingness to pay by three (competitive) consumers for additional units of some good, and the marginal costs of three (competitive) firms that produce that good. a) Compute the competitive equilibrium quantity and price for this market. Also, compute each consumer's surplus and each firm's profits. b) Now suppose that you have access to the same technology (and competitive input markets) as that of Firm 3. Entering the market (that is, launching a fourth firm) means a fixed (yes, sunk too) cost of $10. Would you decide to enter? (Entry has effects on the market, of course.) UNIT FIRM 1 FIRM 2 FIRM 3 1 $3 $1 $2 2 $4 $3 $4 3 $5 $4 $6 4 $6 $7 $8 un 5 $8 59 $9 6 $9 $10 $10 7 $10 $11 $12 UNIT MRA MS B MSC 1 1 $15 $11 $18 2 $12 59 $13 3 $10 S8 $11 4 59 $7 $9 5 S8 $5 S8 6 SS $3 $5 7 $4 52 $4
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