What will happen in the industry in the long run

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Reference no: EM13200896

Consider a firm in a perfectly competitive market with a cost function:

TC = 2102.50 + 10Q + 0.1Q2 MC = 10 + 0.2Q The market price is $50:

a. What quantity of output will the firm produce?

b. What will happen in this industry in the long run?

c. Explain why this firm would not try to sell more output by undercutting the market price (e.g. charge only $49). A calculation is not necessary but you may choose to use it as your explanation.

Reference no: EM13200896

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