This preview shows page 1. Sign up to view the full content.
Unformatted text preview: 2 At what level of output is average cost at its lowest? Also draw a graph showing firm average cost and marginal cost curves. 4. Consider a short-run perfectly competitive equilibrium with 2 identical firms, each with the above cost function. What is the equation for the industry supply curve? 5. The industry demand curve is estimated to be Q = 100 p If there are two firms operating in the market, what is the equation for the residual demand curve for each firm? 6. Solve for the short-run perfectly competitive equilibrium levels of price and output in which there are two firms. 7. What are profits of each firm in this short-run equilibrium? 8. How many firms will compete in the long-run perfectly equilibrium (remember, don't worry if the answer is not a natural number, fractions of firms are ok for our purposes)?...
View Full Document
This note was uploaded on 09/11/2008 for the course ECON 418 taught by Professor Breman during the Spring '08 term at University of Arizona- Tucson.
- Spring '08