View the step-by-step solution to:

Consider a competitive industry consisting of 100 identical firms each with the following cost schedule:

1.  Consider a competitive industry consisting of 100 identical firms each with the following cost schedule:
Output Total Cost
0 300
1 400
2 450
3 510
4 590
5 700
6 840
7 1020
8 1250
9 1540
10 1900
Market demand is given by the following schedule:
Price: $360 290 230 180 140 110 80
Quantity Demanded: 400 500 600 700 800 900 1000
a. Draw the supply curve for an individual firm.  On a separate graph, draw the demand and supply curves for the industry as a whole.  Indicate the equilibrium price and output.  Now draw the individual firm's demand curve on your first graph and show the firm's equilibrium, price and output.
b. Explain why the equilibria found in part (a) are only short-run equilibria.  What will happen in the long run?

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question