Ch.9_-_sample_problem

# Ch.9_-_sample_problem - The first five columns on table...

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competitive firm, while the columns "Price" and "Quantity Demanded" represent the market demand. Qt y FC AVC ATC MC Price Qty Demanded Short Run Industry Qty Supplied 2 50 34 59 38 70 4000 3 50 36 53 42 66 5000 4 50 38 51 46 62 6000 5 50 40 50 50 58 7000 6 50 42 50 54 54 8000 7 50 44 51 58 50 9000 8 50 46 52 62 46 10000 9 50 48 54 66 10 50 50 55 70 There are currently 1000 identical firms in the industry. All firms have the same cost data as above. i. Find the missing values in the table. ii. Find the short run equilibrium P, Q and economic π for each firm, and the short run equilibrium industry quantity supplied. iii. Will there be entry or exit of firms in the long run? Explain. iv. For simplicity, assume that the ATC of the individual firm above are also its long run ATC. In other words, the plant size does not change in the long run. a.

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Ch.9_-_sample_problem - The first five columns on table...

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