Question
The US market for silicon wafers used to make computer chips has the following characteristics: Demand: P = 170 - 0.05q C (firm) = 1500
The US market for silicon wafers used to make computer chips has the following characteristics:
Demand: P = 170 - 0.05q
C (firm) = 1500 + 10q + 0.5q2
MC (industry): MC= 10 + 0.05q
- Suppose the industry is perfectly competitive. Determine the industry equilibrium quantity and price.
- Determine the firm's profit-maximizing quantity of chips and profit. Show the situation using a firm and industry graph.
- What happens in the long run? Describe and show on your graph
- If all firms were to merge together to form a single monopoly firm, with the MC (industry) as the relevant monopoly MC, what would be the profit-maximizing price and quantity?
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Accounting Business Reporting For Decision Making
Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver
4th Edition
978-0730302414, 0730302415
