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Q. Consider a spirited market in which market demand for the product is expressed asP = 75 - 1.5Q also the supply of the product is expressed as P = 25 + 0.50Q. Price, P, is in dollars per unit sold also Q represents rate of production also sales in hundreds of units per day. The typical firm in this market has a marginal cost of MC = 2.5 + 10q.
a. Conclude the equilibrium market price also output.
b. Conclude the level of output of the typical firm, given your answer to part (a) above.
c. If the market demand were to increase to P = 100 - 1.5Q, Illustrate what would the new price also output in the market be? Illustrate what would the new level of output for the typical firm be?
d. If the original supply also demand represented a long-run equilibrium condition in the market, would the new equilibrium (c) represent a new long-run equilibrium for the typical firm? Elucidate.
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