Reference no: EM131005030
Suppose a representative firm with total costs given by the expression TC = 100 + 4q + q2 operates in a perfectly competitive market for avocadoes, where q is the quantity of avocadoes in bushels. Further suppose that the market demand for avocadoes (in bushels) is given by the expression QD = 1,010 – 20P, while the short-run market supply for avocadoes (in bushels) is given by the expression QS = 170 + 10P. (Hint: all of your answers will be whole numbers.)
First, consider the short run.
What is the short run market price of avocadoes (in bushels)? Blank 1
What is the short run profit-maximizing level of output of avocadoes (in bushels) for the representative firm? Blank 2
What is the corresponding level of short-run profit for the representative firm? Blank 3
Next, consider the long run.
What is the long run profit-maximizing level of output for the representative firm? Blank 4
What is the long run equilibrium price? Blank 5
What is the corresponding level of long run profit for the representative firm? Blank 6
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: Suppose a representative firm with total costs given by the expression TC = 100 + 4q + q2 operates in a perfectly competitive market for avocadoes, where q is the quantity of avocadoes in bushels. What is the long run equilibrium price? What is the s..
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