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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.
Explain how a product would reach equilibrium position with the help of -iso-quants and iso-cost curve.
Suppose there are two types of T-shirts: branded ones and unbranded ones and people allocate their spending in a way that they buy both types. Suppose the price of branded T-shirts
What is the goal of a firm?
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