Answer to Question #177147 in Macroeconomics for Boakye Charlotte

Question #177147

A perfectly competitive industry consist of 300 firms with identical cost structures. Their respective market demand and market supply functions are given as Qd= 3000 - 60p and Qs= 500 + 40p.\na) what are the profit maximizing price and output for each individual firm.\nb) assume that firm's in the long run competitive equilibrium, determine each firm's TR, TC and profit.


1
Expert's answer
2021-04-02T11:21:05-0400

na)

300060p=500+40p3000-60p=500+40p

100p=2500100p=2500

p=25p=25

Q=1500300=5Q=\frac{1500}{300}=5

nb)


TR=25×50=1250TR=25\times50=1250

π=TRTC\pi=TR-TC


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