Illustrate what is the short-run supply curve for each firm

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Q. Please identify the major tools of monetary policy and indicate whether they operate through the money multiplier or the monetary base.

Q. There are currently 100 identical firms in the perfectly competitive gadget manufacturing industry, each having short-run total costs given by
STC= 0.5q^2 +10q +5
where q is the output of gadgets per day.

a. Illustrate what is the short-run supply curve for each firm in the company? What is the short-run supply curve for the industry as a whole,Qs?

b. Suppose the market demand for gadgets is given by
Qd = 1100-50p

What is the equilibrium price and quantity in this market? What will each firmâ total short-run profits be?

c. Graph the market demand and supply curves and compute total producer surplus.

d. Show that the total producer surplus you calculated in part (c) is equal to total industry profits plus industry short-run fixed costs.

Reference no: EM1344873

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