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Determining the market equilibrium price

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Reference no: EM132098643

Assume that the pizza market at Duluth is a perfectly competitive market, which means there are many suppliers and all of them are price takers. The daily market demand function for pizza is QD = 670 - 20P and the market supply of pizza is QS= 50P + 110.

A. the market equilibrium price is?

B. A local pizza restaurant, Papa's pizza's short run cost function is C(q1) = 65 +2q1 + 0.15q12, where q1 is the amount of pizza made per day. As a firm on a perfectly competitive market, Papa's pizza is a price taker, and the price you calculated in question A is the market equilibrium price. How many pizzas should Papa's pizza produce to maximize its profit?

C. What's Papa's pizza's highest profit level?

D. Shall Papa's pizza close its business in short run?

Reference no: EM132098643

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