Compute price and quantity in equilibrium, Microeconomics

In the city of Gelato the market for ice cream is perfectly competitive. Aggregate demand for ice cream is:

D(p) = 1200-25p

where p is the price for one cone of ice cream. All ice cream producers in the city have the same total cost function:

C(qi) =10qi

where qi represents the number of ice cream cones firm i produces. Assume that the market is in equilibrium.

a) Derive the firms' marginal and average cost.

b) Compute price and quantity in equilibrium.

Assume that there are 50 firms present in the market.

c) Calculate the number of ice cream cones that each firm produces. Will they produce the same quantity? Why (not)?

d) In general, is it possible that a firm in a perfectly competitive market produces at a price greater than its average cost?


Posted Date: 3/9/2013 1:26:09 AM | Location : United States

Related Discussions:- Compute price and quantity in equilibrium, Assignment Help, Ask Question on Compute price and quantity in equilibrium, Get Answer, Expert's Help, Compute price and quantity in equilibrium Discussions

Write discussion on Compute price and quantity in equilibrium
Your posts are moderated
Related Questions
What are the advantages and disadvantages of monopsony?

Objectives of the WTO: The agreement establishing the WTO reiterates the following objectives of the WTO:  •  Raising standards of living and incomes, ensuring full employm

Monopsony: Demonstrate (with a graph) how a minimum wage can increase both the wage and employment in a monopsony market even when the government sets th

Marginal utility   - It is the measure of the additional satisfaction obtained from consuming one additional unit of good. * Marginal Utility: An instance - The marginal u

what do you understand by demographic window acess by india

what is modern theory

BUREAUCRACY: M de Gournay, an economist of France, first coined the word Bureaucracy in the eighteenth century to refer to "a fourth or fifth form of Government" in which "off

Q. What do you mean by Benefits? The benefit of a project, policy or programme is the positive, expected aspect of an outcome, including the improvement in environmental qualit

factors influencing the conditions of demand for a given product

Let {(y i * ; x i ); 1 ≤ i ≤ n} be an i.i.d sequence of random variables where y i * and x i satisfy the linear relationship y i * = β 0 + β 1 x i + ∈ i with Cov(x i ; ∈