1 / 30

EXAMPLE: ( OLD MIDTERM QUESTION)

EXAMPLE: ( OLD MIDTERM QUESTION) Suppose that the short run cost function of a firm in a competitive industry with many identical firms is given by C(q) =q2+q+9 a) Derive the AC, AVC and MC functions.

jayden
Download Presentation

EXAMPLE: ( OLD MIDTERM QUESTION)

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. EXAMPLE: ( OLD MIDTERM QUESTION) Suppose that the short run cost function of a firm in a competitive industry with many identical firms is given by C(q) =q2+q+9 a) Derive the AC, AVC and MC functions. b) Draw the graphs of AC, AVC and MC functions on the same coordinate plane. For what level of output is AC minimum? Assume that there are 100 firms in the industry c) Derive the supply of each firm and the total supply function and draw their graphs on the same coordinate plane. The market demand function is QD=52-p d) Derive the (residual) demand that each firm faces? e) What will be the equilibrium price and the equilibrium quantity? Draw the equilibrium graphically.

More Related