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Quiz 9 - Therefore Q = n*q a How much output will each firm...

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Econ 302 Quiz 9 McLeod Name ______________________________ ID# ______________________________ 1. (12 points) Suppose there are n identical firms in a market. Each firm’s cost function is given by C = 500 + 20q 2 , where q is the amount that an individual firm produces. This means that an individual firm’s marginal cost is given by MC = 40q. Also, the market demand is given by P = 500 – 6Q, where Q is the total amount of the good produced by all of the firms combined.
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Unformatted text preview: Therefore, Q = n*q. a) How much output will each firm produce? q = 5 b) What will be the market price? P = 200 c) How many firms will there be in long run equilibrium? n = 10 2. (8 points) Suppose a firm has fixed costs in the short run of 432. Also, its variable costs are given by VC = 12q 2 . The firm’s marginal cost is MC = 24q. What is the break-even price for the firm? BE Price = 144...
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