In the town of Pleasantville there is a perfectly competitive industry consisting of 160 firms that produce widgets. The short run marginal cost curve for each firm is given by MC = 175 + 40Q. All of the widgets are sold in the town which consists of 200 identical consumers, each which the following demand curve P = 425 - 20Q. Round your answers to one decimal point.
a. What is equilibrium price of widgets for the industry and the total quantity of widgets sold in Pleasantville?
b. What is the price charged by each firm and what quantity of widgets will each firm produce?
c. How much profit will each firm make if Fixed costs are $200 per firm?
d. Could the short run equilibrium determined above also be a long run Equilibrium for the industry? If so, how you do know? If not, what must occur in order for the industry to achieve a long run equilibrium?
In the town of Pleasantville there is a perfectly competitive industry consisting of 160 firms that produce widgets. The short run marginal cost curve for each firm is given by MC = 175 + 40Q. All of the widgets are sold in the town which consists of 200 identical consumers, each which the following demand curve P = 425 - 20Q. Round your answers to one decimal point.
a. What is equilibrium price of widgets for the industry and the total quantity of widgets sold in Pleasantville?
b. What is the price charged by each firm and what quantity of widgets will each firm produce?
c. How much profit will each firm make if Fixed costs are $200 per firm?
d. Could the short run equilibrium determined above also be a long run Equilibrium for the industry? If so, how you do know? If not, what must occur in order for the industry to achieve a long run equilibrium?
