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Suppose the market for gelato is perfectly competitive, and that gelato is a constant cost industry. The long-run cost function for producing gelato is TC(Q) = Q^3 ? 2Q^2 + 5Q. The demand for gelato is Q = 300 - 2p
Part 1 - What is the long-run equilibrium price of gelato?
Part 2 - How many firms will operate in the long-run competitive equilibrium?
Part 3 - How many units will each firm produce in the long-run competitive equilibrium?
Given that the demand for tickets is a binomial random variable with parameters n = 10 and p = 1/2, illustrate how many tickets should she buy in order to maximize her expected profit.
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