hw4 - Homework#4 due September 8 in class Econ 11 Summer...

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Homework #4 due September 8 in class University of California, Los Angeles Questions 1 and 2 are worth 10 points, while question 3 is worth 5, for a total of 25 points. 1. A perfectly competitive industry has a large number of potential entrants. Each ±rm has an identical cost structure given by C ( q ) = q 2 5 q + 100 (a) What are the average cost and marginal cost functions? At what output level is the average cost minimized? How much is the average cost of production at that output level? (b) Suppose the total market demand is given by Q = 2500 50 P . Find the long-run competitive price. Find the number of ±rms in the industry. What is each ±rm²s pro±t? (c) Now hold that number of ±rms ±xed in the short run (suppose entry is restricted.) What is the short run marginal cost for each ±rm and what is the short run supply function for the industry? (d) Suppose market demand increases to
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This note was uploaded on 09/23/2008 for the course ECON 11 taught by Professor Cunningham during the Summer '08 term at UCLA.

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hw4 - Homework#4 due September 8 in class Econ 11 Summer...

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