Goolsbee1e_Online_Sol_Man_Ch08 - The Calculus of Long-Run Competitive Equilibria 8 Online Appendix 1 Suppose that the market for auto detailing in a

Goolsbee1e_Online_Sol_Man_Ch08 - The Calculus of Long-Run...

This preview shows page 1 - 2 out of 4 pages.

Solution 1. Suppose that the market for auto detailing in a city is perfectly competitive. The auto detailing firms are identical and have long-run cost functions given by TC(Q)= 10 Q3100Q2+ 300Q. Market demand is Q D= 5,000 90Pa. Derive the marginal and average cost curves for a firm in this industry.b. Find the quantity at which average total cost is minimized for each firm.c. Find the long-run equilibrium price in this industry.d. Use market demand to find the equilibrium total industry output.e. Find the equilibrium number of firms. . Q Q Q Q : Q : is
Image of page 1
Image of page 2

You've reached the end of your free preview.

Want to read all 4 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture