Consider a Competitive Industry with Several Firms All of Which

question 39

Multiple Choice

Consider a competitive industry with several firms all of which have the same cost function, c(y) = y² + 4 for y > 0 and c(0) = 0.The demand curve for this industry is D(p) = 50 2 p, where p is the price.The long-run equilibrium number of firms in this industry is

• A)4.
• B)23.
• C)25.
• D)46.
• E)2.

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Definitions:

Antitrust Laws

Legislation aimed at promoting competition within markets by regulating anti-competitive practices, monopolies, and mergers that could restrict trade.

Structuralists

Theorists who believe that human culture and society are heavily influenced by underlying structures, often in fields such as anthropology, sociology, and linguistics.

Sherman Act

An antitrust law enacted in 1890 to combat anti-competitive practices, reduce market monopolies, and preserve economic competition.

Vertical Merger

The merger of one or more firms engaged in different stages of the production of a particular final good.