Estimate equilibrium price and quantity

Reference no: EM1374411

In 2001, the box industry was perfectly competitive. The lowest point on long run average cost curve of each of identical box producers was dollar four, and this minimum point occurred at an output of 1,000 boxes every month. The market demand curve for boxes was

Qd = 140,000 - 10,000P

where P is the price of a box (in dollars per box) and Qd is the quantity of boxes demanded per month. The market supply curve for boxes was

Qs = 80,000 + 5,000P

where Qs is the quantity of boxes supplied per month.

[A] Find the equilibrium price of a box? Is this the long-run equilibrium price?

[B] How many firms are in this industry when it is in long-run equilibrium?

Reference no: EM1374411

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