Posted by **john** on Sunday, November 13, 2011 at 6:03am.

since the AC curve in the problem is upward-sloping everywhere, it is not possible to construct a zero-profit equilibrium given the assumptions of the problem (this outcome requires a U-shaped AC curve). this problem will consider an alternative example where a long-run equilibrium exists. let the total cost function for an individual firm be give by C = 240Q - 40Q^2 + 2Q^3. compute average cost for Q = 1, 2, 3,...,14, 15.

a) using your results, find the long-run equilibrium price in the market. this price is given by p = ?, and output per firm is Q = ?.

b) suppose that the (inverted) market demand curve for the product is given by Q = 50000 - 10000P. what total quantity is demanded at the long-run equilibrium price?

c) from (b), you know how much total output must be delivered by all firms operating int he long-run equilibrium. using this number along with the results from part (a), compute the number of firms in the industry in the long-run equilibrium. this number is ?.

## Answer this Question

## Related Questions

- micro - which of the following statements is true of the oligopoly that can ...
- economics - if production displays economies of scale, the long run average cost...
- MICROECONOMICS - Hello ive been struggling with this problem for about 2 days ...
- Managerial Economics - I am trying to understand how to variate between MC and ...
- Another graph - How do I make a graph of f'(-1) = f'(1) = 0, f'(x) > 0 on (-1...
- Economics - Suppose a monopolistically competitive firm’s demand is given by P...
- economics - A monopolist faces an upward-sloping marginal cost curve. Its ...
- Economics - Suppose a firm faces a downward sloping demand curve givven by the ...
- Microeconomic - (a) Use a normal downward sloping demand curve and an upward ...
- economics - Q AC MC 1 4 12 2 8 20 3 12 28 4 16 36 5 20 44 6 24 52 7 28 60 8 32 ...