Posted by Jill on Monday, April 5, 2010 at 12:05pm.
The shortrun cost curve for each firm's long run equilibrium output is C=y^220y+400. Calculate the shortrun average and marginal cost curves. At what output level does shortrun average cost reach a minimum? I already know the MC and the SRA is TC/Q. I got the minimum as 10. Is that right?
b) Calculate the shortrun supply curve for each firm and the industry shortrun supply curve? Total market demand is y=250020p. Each firm has an identical cost structure such that longrun avg. cost is minimized at an output of 20. The minimum avg. cost is $30.

microeconomics  lachisa, Tuesday, April 6, 2010 at 3:47am
the shortrun average cost is
TAC=y^2/y20y/y+400/y
=y20+400/y
The marginal cost curve is the first derivative of the cost curve.
so,mc=2y20
short run average cost reaches it's minimum when smc=sAc or the derivative of SAC=0
SO,2y20=y20+400/y
Answer This Question
Related Questions
 economics  This is going to be really long, but I want to see if my answers are...
 Microeconomics  A perfectly competitive industry has a large number of ...
 Microeconomics help please (urgent)  True or False? Explain your reasoning. a...
 Advanced MicroEconomics  Construct a shortrun supply function for a firm whose...
 Economics  Short run profit maximization  Given the following for perfectly ...
 economics  In longrun equilibrium, the perfectly competitive firm's price is ...
 economics  suppose a firm's constantreturns to scale production function ...
 Micreoeconomics  1. Assume a perfectly competitive constant cost industry, ...
 ECON  A pure monopolist sells output for $4.00 per unit at the current level of...
 Advanced MicroEconomics  In a competitive market, there are two groups of ...
More Related Questions