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

Elasticities and secondary axis graphs, Create a chart with a secondary ver...

Create a chart with a secondary vertical axis to plot related data series with different scales. Use the Combination Chart Fashion worksheet to create and format a combination c

Economic analysis of asset replacements, An important aspect of municipal f...

An important aspect of municipal finance involves capital budgeting and resource allocation.  In some cases, resource allocations involve expenditures that are not directly revenue

Explain why each of the following factors may influence the, Explain why ea...

Explain why each of the following factors may influence the own price elasticity of demand for a commodity. (i) Consumer preferences, that is, whether consumers regard the commod

Calculate wi’s cost of debt and wacc, 1.    Introduction Wood Investm...

1.    Introduction Wood Investments (WI) is a private equity fund that specialises in the leveraged acquisition of publicly-quoted companies with the intention of producing h

Indifference curves between consumption goods and leisure, How many hours w...

How many hours will an individual allocate to leisure if their indifference curves  between consumption goods and leisure are concave to the origin? Show in figures and explain in

Token privatisation, Token Privatisation: This implies the sale of 5 per ...

Token Privatisation: This implies the sale of 5 per cent or 10 per cent shares of a profit-making public sector enterprise in the market with the objective of obtaining revenue t

Coefficient of the explanatory variable, Problem: (a) Why is an error t...

Problem: (a) Why is an error term added to a regression and explain its importance in the OLS procedure? (b) Suppose we have a linear equation with a constant term, one expl

Explain about the integrability problem, Explain about the integrability pr...

Explain about the integrability problem. The Integrability Problem: Provide a system of demand functions x(p, m). Is there essentially a utility function by which such deman

Determine the economic productivity level, Determine the economic productiv...

Determine the economic productivity level Up until 1500 as best we can tell there had been next to no growth in output per worker for the average human for millennia. Even in 1

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