Determine new srce price firm quantity market quantity and

Reference no: EM13455271

Consider a firm with the following production schedule and a fixed cost in the short run of 19. This fixed cost comes from using the unique quantity of the fixed input that minimizes LRAC. Assume all of the firms are identical firms in the long run and all the firms can only produce whole quantities (i.e., Q=3.5 not possible)

q VC 1 16 2 29 3 40 4 49 5 59 6 71 7 86 8 106

a) Find the LR comp. eq. price, firm quantity, and market quantity if this LR equilibrium has 100 firms.

Assume there is a new market demand for this good that contains the following points:

P QD P QD P QD 8 1316 13 1101 18 886 9 1273 14 1058 19 843 10 1230 15 1015 20 800 11 1187 16 972 21 757 12 1144 17 929 22 714

c) Find the new SRCE price, firm quantity, market quantity, and firm profit, and the new LRCE price, firm quantity, and number of firms.

d) Draw a picture of the market and firm illustrating the SR and LR situation in (c).

Reference no: EM13455271

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