In a perfectly competitive market, the cost structure of the typical firm is given by: C =
Question:
In a perfectly competitive market, the cost structure of the typical firm is given by: C = 25 + Q2 − 4Q, and industry demand is given by: Q = 400 − 20P. Currently, 24 firms serve the market.
a. Create a spreadsheet (similar to the given example) to model the short-run and long-run dynamics of this market.
b. What equilibrium price will prevail in the short run?
c. What equilibrium price will prevail in the long run?
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Step by Step Answer:
a and b Using the spreadsheet optimizer we find the shortrun equilibrium price as follows Set ne...View the full answer
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Related Book For 
Managerial Economics
ISBN: 978-1118808948
8th edition
Authors: William F. Samuelson, Stephen G. Marks
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