ch8_p3 - run? Explain. What effect will entry or exit have...

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8_3. Suppose you are given the following information about a particular industry:   Q D = 6500 - 100 P M arket demand Q S = 1200 P M arket supply C ( q ) = 722 + q 2 200 F irm total cost function MC ( q ) = 2 q 200 F irm marginal cost function . Assume that all firms are identical, and that the market is characterized by pure  competition. a. Find the equilibrium price, the equilibrium quantity, the output supplied  by the firm, and the profit of the firm. b. Would you expect to see entry into or exit from the industry in the long-
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Unformatted text preview: run? Explain. What effect will entry or exit have on market equilibrium? c. What is the lowest price at which each firm would sell its output in the long run? Is profit positive, negative, or zero at this price? Explain. d. What is the lowest price at which each firm would sell its output in the short run? Is profit positive, negative, or zero at this price? Explain....
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This note was uploaded on 12/28/2009 for the course ECON 120 taught by Professor Walsh during the Fall '09 term at University of Illinois, Urbana Champaign.

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