Long-run market adjustment-perfect competition

Assignment Help Microeconomics

Reference no: EM1366762

Firm Z, operating in a perfectly competitive market, can sell as much or as little as it wants of a good at a price of $16 per unit. Its cost function is C=50+4Q+2Q^2. The associated marginal cost is MC=4+4Q, and the point of minimum average cost is Qmin=5

a) Determine the firm`s profit-maximizing level of output. Compute its profit.

b) The industry demand curve is Q=200-5P. What is the total market demand at the current $16 price? If all firms in the industry have cost structures identical to that of firm Z, how many firms will supply the market?

c) The outcomes in parts (a) and (b) cannot persist in the long run. Explain why. Find the market`s price, total output, number of firms, and output per firm in the long run.

d) Comparing the short-run and long-run results, explain the changes in the price and in the number of firms.

Reference no: EM1366762

Questions Cloud

Personal growth and development : Do personal growth and development seem more urgent today and Why do personal growth and development seem more urgent today than they were in the past?

Calculate total dollar profit : Todd Winningham IV has $4,000 to invest. He has been seeing at Gallagher Tennis Clubs, Corporation, common stock. Gallagher has issued a rights offering to its common shareholders.

Special events management in hospitality and tourism : In relation to Special Events Management in Hospitality and Tourism, list and discuss the details you would include on a site inspection list. Explain your reasoning.

Plan a large corporate sponsored event open to public : What trends in event catering would you institute to accommodate changing tastes in alcohol?

Long-run market adjustment-perfect competition : Firm Z, operating in a perfectly competitive market, can sell as much or as little as it wants of a good at a price of $16 per unit. Its cost function is C=50+4Q+2Q^2. The associated marginal cost is MC=4+4Q, and the point of minimum average cost ..

Show the management control process : Based on the above information, what recommendation would you make concerning possible division closings and since the above data represents semiannual information, what other variables should be included in the decision to close down a division?

Determining present value : You decided to play the lottery & you were the only winner of a jackpot amount at $50,000,000. You contact the lottery and they make you the following offer:

Concept as comparable worth be for business in general : Show what might the implications of such a concept as comparable worth be for business in general

Show the job over seas : Show what does that mean to you now that you've encountered several aspects of international business

User Account

All Pages