Compute price and quantity in equilibrium, Microeconomics

Assignment Help:

In the city of Gelato the market for ice cream is perfectly competitive. Aggregate demand for ice cream is:

D(p) = 1200-25p

where p is the price for one cone of ice cream. All ice cream producers in the city have the same total cost function:

C(qi) =10qi

where qi represents the number of ice cream cones firm i produces. Assume that the market is in equilibrium.

a) Derive the firms' marginal and average cost.

b) Compute price and quantity in equilibrium.

Assume that there are 50 firms present in the market.

c) Calculate the number of ice cream cones that each firm produces. Will they produce the same quantity? Why (not)?

d) In general, is it possible that a firm in a perfectly competitive market produces at a price greater than its average cost?

 


Related Discussions:- Compute price and quantity in equilibrium

Problems relating to national income estimation, Problems relating to natio...

Problems relating to national income estimation: Changing prices of goods and services . Prices of goods and services do change from one period to another. This makes compari

Gdp growth, GDP Growth, Employment and Poverty: The advocates of econo...

GDP Growth, Employment and Poverty: The advocates of economic reforms point out that the reform process has the potential of accelerating economic growth. After the teething t

1, a) Consider the following flows (in thousand of people) between the vari...

a) Consider the following flows (in thousand of people) between the various labour market states in a particular month: UE = 240 000; UNLF = 180 000; EU = 190 000; NLFU = 220 000

#proposed merger between heinz and beech-nut scrutinized, Who are the compe...

Who are the competitors in the jarred baby food market? What market share do they have? How do Heinz and Beech-Nut compete with one another? Are the barriers to entry high or low f

Elasticity of demand, elasticity of demand for demand function Q=10-2p for ...

elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2

Marginal physical product of labor, #q7. Problem-solving question: Use the...

#q7. Problem-solving question: Use the following data for a firm’s output at various levels of employment (L) to calculate: a) its marginal physical product of labor (MPPL) sched

Demand and supply, During the 1990s, technological advance reduced the cost...

During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use supply and demand diagrams, how the following markets are affected in terms of pr

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd