Answered: In graph A below shows the market…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

In graph A below shows the market demand and supply in a competitive market, and graph B shows the cost curves of a representative firm in that industry.

a. What are the market equilibrium price and quantity?

Equilibrium price: $

Quantity traded:

b. At equilibrium, what quantity is the firm producing? What is its total profit or loss? Leave no cells blank - be certain to enter "0" wherever required.

Quantity:

Total profit or loss $

165
150
135
120
105
Price
४ जे 8 जै: G
90
75
60
45
30
15
0
A
150 300 450 600 750 900 1050120013501 500
Quantity per period
S

Price/costs
165
150
135
120
105
90
75
60
45
30
15
O
B
1 2 3 4 5 6 7 8 9 10 11 12 13
Quantity per period
MC
AC

Definition Video Formula Definition Phenomenon in which market supply and demand balance each other. Market equilibrium is the economic state in which the market demand curve intersects the market supply curve, giving us the equilibrium price and equilibrium quantity for which a commodity can be sold and purchased in an economy. When market equilibrium is achieved, it suggests that all resources have been allocated efficiently and that there is just a distribution of income and resources in the economy. Video Formula

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