PERFECT COMPETITION
Short Run
1.
The short run cost function of the typical firm of one industry is C = 0,5 q
2
- 10 q + 200.
a)
Find the short-run supply function for this firm
b)
Find the short-run supply function for the industry if there were 50 identical firms in that
industry.
c)
If the market demand function is Q =
1500 - 50 P, find the short-run equilibrium of the firm
and the industry. Compute total profits of the industry,
d)
If the market demand function becomes Q = 2000 - 50 P, find the new equilibrium and the
profits earned by each firm.
e)
Calculate the consumer surplus in both cases.
2.
There are 10 identical firms in a competitive industry. The short-run cost function of each of them
is C = 250 -12q + 2q
2
.
a)
Calculate the short-run supply firm of the firm and the industry
b
) The market demand function for that good is P= 160-Q, where Q is total industry output.
Calculate the short-run equilibrium price and quantity in this market
3.
There are 100 identical firms in an industry, each of them having the following short-run total cost
function: C = 36 + 8q + q
2
.
a)
Calculate the short-run supply firm of the firm and the industry.
b)
The market demand function is P = 32 - Q/50, where Q is total industry output. Find the
market equilibrium price and quantity. How much will each firm produce?
4.
In a competitive market, demand is given by Q = 500 - 50 P. There are two groups of firms in that
market: the firm has 100 firms with a cost structure given by C

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