# econ

posted by .

P=15-Q/1000. Suppose there are two firms in this market. Compute equilibrium quantities and profits for each firm, and the equilibrium market price. Hint: Start with thinking about the number of loaves a firm will sell in a month — this quantity must be where its marginal revenue is equal to its marginal cost. But notice that firm 1’s marginal revenue will depend on firm 2’s quantity choice, and vice versa. To construct a spreadsheet, start by constructing a formula for firm 1’s marginal revenue as a function of its quantity choice and firm 2’s quantity choice. If firm 1 is making 1000 loaves and firm 2 is also making 1000 loaves, then firm 1’s marginal revenue is how its revenue changes if it increases quantity by one, assuming firm 2 keeps its quantity at 1000. Do the same firm firm 2, and then use Solver to find quantities where MR = MC for both firms.

## Similar Questions

1. ### economics

suppose a competitive market consists of identical firms with a constant long run marginal cost of \$10. Suppose the demand curve is given by q=1000-p a)What are the price and quantity consumed in the long run competitive equilibrium?
2. ### economics

5. A market contains a group of identical price-taking firms. Each firm has a marginal cost curve MC(Q) = 2Q, where Q is the annual output of each firm. A study reveals that each firm will produce if the price exceeds \$20 per unit …
3. ### 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 68 9 36 76 suppose that there are 70 firms in operating in the industry. using the MC curve, find out how much output in total is delivered to the market at each price …
4. ### economics

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 …
5. ### econ

2. Suppose that firms in an industry have the following cost function: C = 100 + 0.25q2, and the industry faces an inverse demand curve of P = 90 – 2Q. a. I f the industry is competitive, find the long-run equilibrium price, quantity, …
6. ### econ

Suppose there are 1000 identical firms producing diamonds. Diamond miners receive the wage rate w. Assume that the short-run cost function for each diamond-producing firm is C(q) = wq + q2. a. If w = 10, what is the supply curve of …
7. ### econ

Suppose there are 1000 identical firms producing diamonds. Diamond miners receive the wage rate w. Assume that the short-run cost function for each diamond-producing firm is C(q) = wq + q2. a. If w = 10, what is the supply curve of …