Number of firms in market affect each firms demand curve

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Reference no: EM1319580

Q. Consider a monopolistically competitive market with N firms. Each firm's trade opportunities are described by the following equations:
Demand : Q=100/N-P
Marginal Income: MR=100/N-2Q
Total cost: TC=50+Q(squared)
Marginal Cost: MC=2Q

a. Elucidate how does N the number of firms in the market, affect each firms Demand curve? Explain why.

b. Elucidate how many units do each firm produce? (The answers to this also the next two questions depend on N.)

c. Illustrate what price does each firm charge?

d. Elucidate how much profit does each firm make?

e. In the long run, elucidate how many firms will exist in this market?

Reference no: EM1319580

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