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

Help, I have some Microeconomics problem need to be solve, three Long quest...

I have some Microeconomics problem need to be solve, three Long question and 10 multiple-choice. If I give you four hours can you finish.

Analysing the digital economy relative to e business, Problem: a) What ...

Problem: a) What factors would you consider when analysing the digital economy relative to e business? b) "The growing use of the internet by consumers and businesses has re

Oligopoly, characteristics and models of oligopoly by Sweezy,cournot and ed...

characteristics and models of oligopoly by Sweezy,cournot and edgework

Game theory, The following represents the potential outcomes of your first ...

The following represents the potential outcomes of your first salary negotiation after graduation: Assuming this is a sequential move game with the employer moving first, indicate

Marginal utility, If the MU of the 1st unit consumed = 75 utils, and the TU...

If the MU of the 1st unit consumed = 75 utils, and the TU of consuming 2 units is 130 utils, what is the marginal utility of the second unit?

Price change, 1.  Seller has ample time to adjust to price change. 2.  B...

1.  Seller has ample time to adjust to price change. 2.  Buyer's response to small price change is significant. 3.  Buyers are faced with many options when deciding to make a

Microeconomics, Consider the following insurance market. There are two stat...

Consider the following insurance market. There are two states of the world, B and G, and two types of consumers, H and L, who have probabilities pH =0.5 and pL =0.25 (high and low

Explain and illustrate the economy adjustment in medium run, 1- Suppose the...

1- Suppose the economy is currently in recession, and the exchange rate if fixed using the IS-LM model. a) explain and illustrate the economy adjustment ( in the medium run)

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