The market demand for a type of carpet has been estimated as: P = 40 -
0.25Q, where P is price (GHØ/yard) and Q is rate of sales (hundreds of yards per month). The market supply is expressed as: P = 5.0 + 0.05Q. A typical firm in this market has a total cost function given as: C = 100 - 20.0q + 2.0q2.
Determine the equilibrium market output rate and price.
Determine the output rate for a typical firm.
Determine the rate of profit (or loss) earned by the typical firm
When Demand meets Supply for equilibrium Price and Quantity
Equilibrium Price
Equilibrium Quantity
For Typical Firm P=MC
Profit for typical firm
Profit=Revenue-Cost
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