Long run equilibrium, Microeconomics

Assignment Help:

1. Suppose that a monopolistically competitive firm must build a production facility in order to produce a product.  The fixed cost of this facility is FC = $24.  Also, the firm has constant marginal cost, MC = $3.  Demand for the product that the firm produces is given by P = 27-3Q. 

a) Fill in the table below.  If any of your values have decimals, you may round to only one numeral after the decimal (nearest 10th of a dollar). 

Quantity of Output

Price

Total Cost

Average Total Cost

1

 

 

 

2

 

 

 

3

 

 

 

4

 

 

 

5

 

 

 

6

 

 

 

7

 

 

 

8

 

 

 

9

 

 

 

b) How much output will this firm produce if it maximizes profit?

c) What price should this firm charge if it wants to maximize profit?

2. Carefully explain what will happen as we move from the short run to a long run equilibrium in a monopolistically competitive industry if firms are making a positive profit in the short run.  Your explanation should clearly state what will happen to the demand curve facing an individual firm and the reason why this happens.


Related Discussions:- Long run equilibrium

Market Structures, Using the key distinguishing features of any market stru...

Using the key distinguishing features of any market structure describe the market structure for the South African mobile telecommunications industry

Balance of payments account, Balance of payments account: The foreign ...

Balance of payments account: The foreign exchange market is an organizational setting within which individuals, business firms, banks etc buy and sell foreign currency. It has

Revenue, draw the supernormal curve

draw the supernormal curve

Price mechanism, use of diagram how the price mechanism operates to allocat...

use of diagram how the price mechanism operates to allocate scarce resources. use examples to illustrate the answer.

Help, Calculate the number of moles in 15.8 grams of aluminum hydroxide

Calculate the number of moles in 15.8 grams of aluminum hydroxide

Types of inflation in a country, (a) Describe the different types of inflat...

(a) Describe the different types of inflation in a country. (b) Describe the trade-off between inflation and unemployment, using appropriate diagrams. (c) Mauritius has bee

All chapter, sir explain me about all things of microeconomics

sir explain me about all things of microeconomics

Demand and supply, identify which curve (demand or supply) will be affected...

identify which curve (demand or supply) will be affected?

Explain about capacity utilization, Q. Explain about Capacity Utilization? ...

Q. Explain about Capacity Utilization? Capacity Utilization: A company or economy's capacity represents maximum amount of output it can produce. Rate of capacity utilization, h

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