Answer to Question #189858 in Microeconomics for Tamia

Question

A competitive firm has the following cost function C=y² for producing output y. There are 100 firms all behaving competitively.

a) what is the is the individual firms supply curve for milk

b) What is the market supply of milk

c) Suppose the demand curve for milk is estimated to be y=200-50p

What is the equilibrium price and quantity sold?

Answer 1

$$Q_S=a+bp$$

$$Q_S^/=100(a+bp)$$

$$TC=100y^2$$

$$MC=200y$$

$$200-50p=100p$$

$$p=1.33$$

$$Q=133$$