In an oil seed market, there are 5000 producers with identical cost functions. Their cost function is
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Question:
In an oil seed market, there are 5000 producers with identical cost functions. Their cost function is C(q) = 125q2 + 200, where q is the number of bushels of oil seed produced in each period.
a) If the local oil seed market is perfectly competitive, what is the Short-run supply curve of each producer? Also determine the market supply curve.
b) The Long-run cost function for AV's e-scooter rental is C(q) = 2.5q2. If AV can sell as many scooters as he desires at $20, calculate his optimal output. Is AV able to earn economic profits? How do you know?
Related Book For
Microeconomics Principles, Problems and Policies
ISBN: 978-1259450242
20th edition
Authors: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn
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