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.
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.)
b. Equilibrium price = P = $12 ... View the full answer
- Thank you, very much. it was very helpful
- Apr 01, 2018 at 4:25pm
- Welcome. Your success is my greatness!
- Apr 01, 2018 at 4:53pm
- one more question? how did you get 21,000,000?
- Apr 01, 2018 at 4:54pm
- by multiplying 750,000*28
- Apr 01, 2018 at 4:56pm
- Thank you.
- Apr 01, 2018 at 4:58pm