HWk7 - q = 25 // Long-run output per firm P = 2 + 2*(25) =...

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Homework #7 C = 625 + 2*q + q^2 Set price to Marginal Cost P = 2 + 2*q q = (P – 2)/2 Q_s = 100*(P – 2)/2 // Short-run industry supply curve Q_d = 993.75 – 4.6875*P 100*(P – 2)/2 = 993.75 – 4.6875*P P = 20 // Equilibrium Price Q = 900 // Equilibrium Quantity SAC = C/q = 625/q + 2 + q d(SAC)/dq = 1 – 625/q^2 = 0
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Unformatted text preview: q = 25 // Long-run output per firm P = 2 + 2*(25) = 52 // Long-run price per order Q_d = Q_s = 933.75 4.6875*(52) = 690 Number_of_Firms = 690/52 = 13.2692 Extra Credit: SAC = 625/(25) + 2 +25 = 52 (20-52)*25 = -800 // Economic loss of $800...
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