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Consider the perfectly competitive market for burritos. In the short run, a burrito company has a cost curve of STC(Q)=Q^2+4Q+9, the $9 fixed cost is non-sunk.
(a) What is the short-run supply curve for an individual burrito company?
(b) Suppose there are 40 burrito companies in the short-run. What is the market supply curve?
(c) Suppose the market demand curve is Q^D=420−5P. What is the short-run equilibrium price?
The market for beer is perfectly competitive. The price of a barrel of beer is $40. Fine beers is a company that produces the beer and has a total cost funtion of TC = 480 + Q2. It also has a marginal cost given by MC = 2Q, where Q is barrels of beer..
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Suppose a monopolist has costs to produce output of TC=1/6 Q^2+10 and faces the demand curve Q=3000-3P. Find equilibrium quantity, equilibrium price, and monopoly profit.
Why do monopolistic competitors have a tendency to advertise much more than perfectly competitive firms?
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