Suppose That the Market for Ice Cream Sandwiches Is Perfectly

question 142

Essay

Suppose that the market for ice cream sandwiches is perfectly competitive. Firms that produce ice cream sandwiches are identical; their long-run cost functions are given by
. Market demand is
.
a. Find the long-run equilibrium price in this industry.
b. Use market demand to find the equilibrium total industry output.
c. Find the equilibrium number of firms.

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Definitions:

Factoring Fee

A charge assessed by a factoring company for providing cash advances to businesses by purchasing their accounts receivable at a discount.

Accounts Receivable

Outstanding payments due to a firm from its clients for delivered services or products yet to be settled.

Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount in exchange for immediate cash.

Credit Sales

Sales in which revenue is recognized at the point of sale but payment is deferred.