This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: x = 25 = x(1) + x(2) = 5 + 20, while market price is: p = 3. 2. By conventional wisdom, this is a sick industry. 3. Paradoxically, there can still be a new firm entering profitably with the total cost function: C(x, 3) = F(3) + M(3) x for producer 3 over output x ∈ [0, Q(3)], where, F(3) = 24, M(3) = 1, Q(3) = 25. 4. The above situation resembles the rise of the Japanese steel industry after World War II. Suggestion: Plot out the step-ladder shape of supply curves before and after the entry of firm 3....
View Full Document
This note was uploaded on 06/25/2009 for the course ECON 4450 taught by Professor Wan during the Spring '09 term at Cornell University (Engineering School).
- Spring '09