In the Robotics Industry There Are 100 Firms

question 93

Essay

In the robotics industry there are 100 firms. Each firm shares the same long-run cost function. It is: C(q) = 100
. The relevant marginal cost function is MC(q) =
. Each of the 100 firms produce 64 units. The market demand for robotics is: Q_D = 15,000 - 688P. Calculate the market price at this production level. Also, calculate the profits for a representative firm in the robotics industry. If one firm expanded production to 100 units while the remaining 99 firms kept output at 64 units, what would happen to the market price and profits? Would all firms benefit or lose if every firm expanded output to 100 units?

---

Definitions:

Equilibrium Price

The price point at which the quantity of goods supplied equals the quantity demanded, resulting in market balance.

Equilibrium Quantity

At the equilibrium price, the volume of goods or services both offered and sought.

Quantity Supplied

The amount of a good or service that producers are willing and able to offer for sale at a given price level in a given time period.

Equilibrium Price

The point at which the demand for a particular good or service matches its supply, ensuring equilibrium in the market.