What is the market equilibrium quantity of tortillas

Reference no: EM13221990

The market for tortillas is perfectly competitive, with market demand for packages of tortillas given by P=1 .-00002Q, with price in dollars per package and Q in thousands of packages. The short-run marginal cost curve for a typical tortilla factory is MC = .05 .00+05q, with MC in dollars per package and q in thousands of packages.The fixed cost of running a tortilla factory is $10,000 per firm.

(a) If there are 100 identical factories, determine the short-run industry supply function.

(b) What is the market equilibrium quantity of tortillas, and what is the equilibrium price?

(d) What is the typical factory's profit?

Reference no: EM13221990

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