D,E,F Long Run EquilibriumConsider a perfect competitive market with n identical firms. The cost functions of an individualfirm are:The market demand is given byTC=q³ 4q² + 74qMC=3q² - 8q+74.P= 120-Qa) In the above space draw two graphs one for the market and one for the firm to show the longrun equilibriumb) In the long run, each firm will produce q..i.e. the firm is operating atits minimumc) The long run equilibrium price must be P=.d) Thus the total amount purchased will be Q=.e) This means there is enough room for n=.f) No more entry will take place because..g) Show all equilibrium values on your graph..firmsBecause.because...

Total Cost function : TC = q3- 4q2 + 74q Market Demand : P = 120 - Q Long run equilibrium for a…

Long Run Equilibrium Consider a perfect competitive market with n identical firms. The cost functions of an individual firm are: The market demand is given by TC=q³ 4q² + 74q MC=3q²-8q+74. - P= 120-Q

Long Run Equilibrium Consider a perfect competitive market with n identical firms. The cost functions of an individual firm are: The market demand is given by TC=q³ 4q² + 74q MC=3q²-8q+74. - P= 120-Q

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter9: Price Takers And The Competitive Process

Section: Chapter Questions

Problem 16CQ

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Question

D,E,F

Long Run Equilibrium
Consider a perfect competitive market with n identical firms. The cost functions of an individual
firm are:
The market demand is given by
TC=q³ 4q² + 74q
MC=3q² - 8q+74.
P= 120-Q
a) In the above space draw two graphs one for the market and one for the firm to show the long
run equilibrium
b) In the long run, each firm will produce q..
i.e. the firm is operating at
its minimum
c) The long run equilibrium price must be P=.
d) Thus the total amount purchased will be Q=.
e) This means there is enough room for n=.
f) No more entry will take place because..
g) Show all equilibrium values on your graph
..firms
Because.
because...

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