In the Robotics Industry There Are 100 Firms

question 107

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?

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Definitions:

Future Cash Flow

The amount of money that is expected to be received or paid out by an entity in the future, often considered for investment or project valuations.

Discount Rate

It denotes the interest rate utilized for determining the present value of future cash flows in the course of discounted cash flow analysis.

Future Value

The value of an investment or cash flow at a specific future date, adjusted for time value of money and interest.