What is minimum price at which firms will continue operating

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Reference no: EM13238501

Assume that there are a large number of identical firms in a competitive industry, each with the cost function:

TC = 25+4q+q2

a. What is the minimum price at which firms will continue operating in the short run? In the long run?

b. Assume that there are n firms in the industry. What is the short-run industry
supply function?

c. Industry (inverse) demand is given by P = 40-Q/5. If there are 20 firms in the industry, is the industry in long-run equilibrium? What is the market price?
Calculate and graph (dont worry about graph) the profits of an individual firm (along with AC, AVC, and MC curves).

d. How many firms will serve the market in long-run equilibrium

Reference no: EM13238501

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