A Perfectly Competitive Industry Consists of Many Identical Firms, Each

question 137

Essay

A perfectly competitive industry consists of many identical firms, each with a long-run average total cost of LATC = 800 - 10Q + 0.1Q² and long-run marginal cost of LMC = 800 - 20Q + 0.3Q².
a. In long-run equilibrium, how much will each firm produce?
b. What is the long-run equilibrium price?
c. The industry's demand curve is Q^D = 40,000 - 70P. How many units do consumers buy in long-run equilibrium? How many firms are in the industry?
d. Suppose the industry's demand curve rises to Q^D = 40,600 - 70P. How many new firms will enter this constant-cost industry in the long run?

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Definitions:

Inequity

A situation in which a person perceives that he or she is receiving less than he or she is giving or is giving less than he or she is receiving.

Alienated Relationships

Relationships characterized by emotional isolation, detachment, or estrangement between individuals or groups.

Amitai Etzioni

A sociologist known for his work on socioeconomics, organizational theory, and social philosophy.

High Negative Intensity

A psychological state characterized by strong feelings of negativity or pessimism, often affecting an individual's behavior and outlook.