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:

Indirect Object-Direct Object Constructions

Grammatical structures in sentences where an action is performed by the subject on two objects, with the indirect object typically receiving the direct object.

Passive Sentences

Sentences where the subject is the recipient of the action rather than the doer, often characterized by the use of forms of the verb "to be" followed by a past participle.

Vocabulary Development

The process of learning and acquiring new words and phrases to communicate effectively in a language.

Heredity

The genetic transmission of characteristics from parents to their offspring, affecting traits such as height, eye color, and susceptibility to certain diseases.