Perfectly competitive, constant-cost industry has a market demand curve P =50 1 answer below »


Perfectly competitive, constant-consume perseverance has a bargain call-for deflexion P =50 – (1/7)Q.

Each fixed has a U-shaped long-run mediocre consume operation after a while a restriction of $10. The

efficient flake of origination for these fixeds is 5 units.

a) What is the long-run equilibrium bargain expense and size?

b) What is the long-run sum of fixeds in the perseverance? How greatly does each

produce? What are their income?

c) Suppose that bargain call-for drops so that the new call-for deflexion is P =40 –

(1/7)Q. If the inadequate-run marginal consume of fixeds is SMC= 2q – 5, what is the

short-run equilibrium expense and size in the bargain? What is the output of

each fixed in the inadequate run?

d) Now perceive the new long-run equilibrium expense and size. What is the new

equilibrium sum of fixeds?