Reference no: EM133081851

1. In a long-run perfectly competitive industry with identical firms, the (total) cost function for each firm is C = 72 + 2q2. What is the industry price? (Hint: Each firm operates at the minimum of its average cost curve where MC = AC. Use this relationship to determine the firm's output level, then use the marginal cost function to determine the industry price.)

2. Consider a perfectly competitive industry with 100 firms. Each firm has a short cost function given by C = 20 + q2. The short-run industry demand function is Q = 1000 - 50P. Determine the short-run equilibrium output. (Hint: Determine the short-run supply function for a firm, then multiply by 100 to get the industry supply function. Use the industry supply and demand functions to get the equilibrium quantity.)

3. The willingness to pay of 4 different consumers for a product supplied by a monopoly firm is given in the following table:
Consumers Willingness to pay ($)

Jeff 12

Collin 9

Albert 8

Jenny 6

The marginal cost of production MC = $7. If the monopolist uses perfect price discrimination, its revenue = $ ___________.