Lobster productin firm in perfectly competitive market

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Reference no: EM131112252

Consider the costs for the following lobster productin firm in a perfectly competitive market: TC = 80 +10q+q² & MC= 10 + 2q

a) What is the supply function for the firm? Write the supply function as a function of P (i.e. solve for Qs)

b) Currently there are 500 lobster producers in the market with identical costs. What is the supply function of the market? (hint: remember that the market supply curve is the number of firms times Qs)

c) Using the market supply and demand functions for lobster, find the short run equilibrium price and quantity. How many lobsters does each individual firm sell?

d)Should the firm keep its store open or closed in the short run? What are the firm's losses/profits? Is the firm currently in long run equilibrium? How do you know? What will happen to the number of firms in the market? Why?

e) What is the long run equilibrium price and quantity? What will be the total number of firms in the market?

I would appreciate to see the work involved in these problems if possible. I am struggling to grasp this question and it will be on my exam tomorrow.

Reference no: EM131112252

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