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

Monopoly, b) Why is monopoly considered to be generally against public inte...

b) Why is monopoly considered to be generally against public interests, and what policy instruments can be used to regulate monopolies?

Society of international financial telecommunications, Society of Internati...

Society of International Financial Telecommunications: The foreign exchange market operates worldwide, that is, the reach of the foreign exchange market is global. The foreign

Managerial Economics, What does economic theory contribute to managerial ec...

What does economic theory contribute to managerial economics? Explain

Purchasing power parity (ppp), Purchasing Power Parity (PPP): The exch...

Purchasing Power Parity (PPP): The exchange rate is determined by the relative purchasing power of currency withineach country.  For example, if a product X costs Rs. 100 in I

Marginal Cost, Can marginal cost be constant? If so, does this mean that ma...

Can marginal cost be constant? If so, does this mean that marginal cost are equal to average variable cost?

Price mechanism, discuss the term of price mechanism,give examples to elabo...

discuss the term of price mechanism,give examples to elaborate the concept clearly

Answer related to the article , In the following article , I want you to co...

In the following article , I want you to comment on the type of market structure and whether Kinked Demand apply and what will possibly be the market share for GM and VW? ""In case

Evaluate the demand function, Lab Exercise 1. Taco Del Mar has completed a ...

Lab Exercise 1. Taco Del Mar has completed a study of weekly demand for its tacos in Washington State's regional markets.  The study developed the following demand function: Q =

Eoq formula, EOQ formula  The EOQ equation assumes demand is constant ...

EOQ formula  The EOQ equation assumes demand is constant and steady. It also assumes that demand for different items is independent. This is inappropriate for controlling inve

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