Answer to Question #177147 in Macroeconomics for Boakye Charlotte

Question

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.

Answer 1

na)

$$3000-60p=500+40p$$

$$100p=2500$$

$$p=25$$

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

nb)

$$TR=25\times50=1250$$

$$\pi=TR-TC$$