Microeconomics (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134184241
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Question
Chapter 8, Problem 10E
(a)
To determine
The
(b)
To determine
Identify the effect of entry and exit of the firms in the long run on the
(c)
To determine
Level of output that sells at the lowest price level.
(d)
To determine
Identify the lowest price level in the short run.
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A perfectly competitive industry is in long-run equilibrium. Each of the identical firms has a long- run
cost function C = 100 + q². As a result, a firm's marginal cost function is MC = 2q. In the long-run
competitive equilibrium,
(a) How much does the firm produce?
(b) What is the equilibrium price?
(c) If the market quantity demanded at the equilibrium price is Q = 2500, how many firms are in the
market?
Consider a competitive industry with a large number of firms, all of which have identical cost functions c(y) = y2 + 1 if y > 0 and c(y) = 0 if y = 0. The demand curve for this industry is D(p)= 52-p.
1. Find marginal cost and average cost functions.2. What is the competitive price in this market?3. What will be the number of firms in the industry?
Suppose you are given the following information about a particular industry:
QD = 6500 – 100P Market Demand
QS = 1200P Market Supply
TC(q) = 722 + q2/200 Individual firm’s total cost function
MC(q) = q/100 Individual firm’s marginal cost function
Assume that all firms are identical and that the market is characterized by perfect competition.
Find an individual firm’s supply curve.
How many firms are there currently in the market?
Find the equilibrium price and equilibrium market quantity.
How much is output supplied by each firm, and how much profit does each firm make in the short run?
Would you expect to see entry into or exit from the industry in the long run? Explain.
What effect will entry or exit have on the market equilibrium? Find the long-run equilibrium price, the number of firms, and the amount of output each firm produces in the long run.
Chapter 8 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
Ch. 8 - Prob. 1RQCh. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Prob. 4RQCh. 8 - Prob. 5RQCh. 8 - Prob. 6RQCh. 8 - Prob. 7RQCh. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQ
Ch. 8 - Prob. 11RQCh. 8 - Prob. 12RQCh. 8 - Prob. 13RQCh. 8 - Prob. 14RQCh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Suppose you are the manager of a watchmaking firm...Ch. 8 - Prob. 5ECh. 8 - Prob. 6ECh. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - A sales tax of 1 per unit of output is placed on a...Ch. 8 - Prob. 15E
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