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In the country of Sleep-well, the inhabitants' main activity is... sleeping. Despite the loss of productivity that this entails, the country has a profuse and renowned production of blankets,mattresses, bed covers, and the like. Particularly, the market for pillows is Sleep-well's flagship;the market is perfectly competitive and has ? firms present, all of which have the similar cost function. The aggregate manufacture is 8,000 super-comfort pillows /day.
Question: Given that the newly merged firm is maximizing its profit, what will be the price of a super-comfort pillow?
We can analyse the equilibrium of a firm under Perfect Competition in both the long run as well as in the short-run. SHORT RUN EQUILIBRIUM OF A FIRM UNDER PERFECT COMPETITION
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