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New Firm in Perfect Competition The market demand and supply curves in a perfectly competitive industry are given by: P = 24 - Q/1,000 and P = -4 +...

New Firm in Perfect Competition


The market demand and supply curves in a perfectly competitive industry are given by: P = 24 - Q/1,000 and P = -4 + Q/750.

Complete the following questions.


b) Calculate the equilibrium price and output in this industry.


 Equilibrium price

 = $


 Equilibrium output

 = 




c) Now assume that an additional firm is considering entering. This firm has a short-run MC curve defined by MC = 7 + 0.5q, where q is the firm's output. If this firm enters the industry, what output should it produce? (Hint: It will set P = MC.)


Output

 = 

Top Answer

b. Equilibrium price = P = $12  ... View the full answer

5 comments
  • Thank you, very much. it was very helpful
    • jayjayb47
    • Apr 01, 2018 at 4:25pm
  • Welcome. Your success is my greatness!
    • kawira1
    • Apr 01, 2018 at 4:53pm
  • one more question? how did you get 21,000,000?
    • jayjayb47
    • Apr 01, 2018 at 4:54pm
  • by multiplying 750,000*28
    • kawira1
    • Apr 01, 2018 at 4:56pm
  • Thank you.
    • jayjayb47
    • Apr 01, 2018 at 4:58pm

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Other Answers

a) Equilibrium Price= $12 b) Equilibrium... View the full answer

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