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Unformatted text preview: K = 5 L Q ATC 1 4 7/4 2 7 9/7 3 9 11/9 4 10 13/10 Minimum ATC is at L=3, Q=9 In a competitive market, p = min of ATC = 11/9 NOTE: Could get p using VMPL = W or p(5-L) = 2 This gives a different answer, why? 4. Say K = 5. If I told you the demand curve for this product was Q = 200 – 90p, what else could you tell me about the market? We already know price, and q for each firm. What don’t we know? Total Q and the total number of firms, we need demand to tell us that. Q = 200 – 90 (11/9) = 200 – 110 = 90 So there must be 10 firms in the market...
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This note was uploaded on 09/02/2009 for the course ECON 32985 taught by Professor Hickenbottam during the Spring '09 term at University of Texas.
- Spring '09