Describe transition from short-run to long-run equilibrium

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Reference no: EM13214956

Given the total cost function TC = 400 + 45Q - 8Q2 + 0.7Q3

(1) Compute average variable cost, average cost, and marginal cost for quantities from 1 to 20. Plot them on a graph.

(2) Indicate the output level at which diminishing returns occur. Also indicate the point of maximum cost efficiency (i.e., the point of minimum average cost)

A monopolistic competitive firm has demand and cost curves given by:

QD = 1000 - 2P
TC = 5,000 + 50Q

a. At what price should this firm sell its product?
b. What do you think would happen as the firm moves toward the long run? Explain.

Describe the transition from short-run to long-run equilibrium in a monopolistically competitive industry.

Reference no: EM13214956

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