2 In A Competitive Market The Industry Demand And Supply Curves Are P 70 Q And P 40 2qs A Find The Market Equilibr 1 (25.74 KiB) Viewed 49 times
2 In A Competitive Market The Industry Demand And Supply Curves Are P 70 Q And P 40 2qs A Find The Market Equilibr 2 (33.9 KiB) Viewed 49 times
2. In a competitive market, the industry demand and supply curves are P=70-Q and P = 40+2Qs. a. Find the market equilibrium price and output. b. Suppose that the government provides a subsidy to producers of $15 per unit of the good. Since the subsidy reduces each supplier's marginal cost by 15, the new supply curve is P=25+2Qs. Find the market's new equilibrium price and output. Provide an explanation for the change in price and quantity. c. A public interest group supports the subsidy, arguing that it helps consumers and producers alike. Economists oppose the subsidy, declaring that it leads to an inefficient level of output. In your opinion, which side is correct? Explain carefully..
1. Firm Z, operating in a perfectly competitive market, can sell as much or as little as it wants of a good at a price of $16 per unit. Its cost function is C = 50 +4Q + 2Q² The associated marginal cost is MC- 4+4Q and the point of minimum average cost is Qmin-5. a. Determine the firm's profit-maximizing level of output. Compute its profit. b. The industry demand curve is Q=200-5P. What is the total market demand at the current $16 price? If all firms in the industry have cost structures identical to that of firm Z, how many firms will supply the market? c. The outcomes in part a and b cannot persist in the long run. Explain why. Find the market price, total output per firm in the long run. no no
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!