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In the city of Gelato the market for ice cream is perfectly competitive. Aggregate demand for ice cream is:
where p is the price for one cone of ice cream. All ice cream producers in the city have the similar total cost function:
where Qi represents the number of ice cream cones firm i makes. Suppose that the market is in equilibrium.
a) Derive the firms' marginal and average cost.
b) Compute price and quantity in equilibrium.
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why firms under oligopoly market should follow price rigidity?
p=10, TC= 1000+2Q+.01Q^2, Q=?
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define scarcity and opportunity cost..
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