Suppose the inverse market demand curve is p 100 Q , where p is the market price and Q is the aggregate market quantity Suppose there are n firms in the market The output of firm i is denoted by q i So Q q 1 q 2 q i q n the market A firm is cost function is c i ( q i ) 25 q i 2 , if q i 0 0, if q i 0 This cost function shows that there are is no entry cost Determine the average and marginal cost curves of firm i and their shapes, and draw them in a diagram Using the diagram in part (i), determine the long run equilibrium output produced by any firm i in a perfectly competitive market, the long run equilibrium market price, market output, and the number of firms Denote these equilibrium outcomes with superscript pc that denotes perfect competition Represent them diagrammatically

Question: Suppose the inverse market demand curve is p=100-Q , where p is the market price and Q is the aggregate market quantity. Suppose there are

Suppose the inverse market demand curve is p=100-Q, where p is the market price and Q is the aggregate market quantity. Suppose there are n firms in the market. The output of firm i is denoted by qi. So Q=q1+q2+…+qi+…+qn the market. A firm i’s cost function is ci(qi)=25+qi2, if qi>00, if qi≤0. This cost function shows that there are is no entry cost.

Determine the average and marginal cost curves of firm i and their shapes, and draw them in a diagram.
Using the diagram in part (i), determine the long-run equilibrium output produced by any firm i in a perfectly competitive market, the long-run equilibrium market price, market output, and the number of firms. Denote these equilibrium outcomes with superscript “pc” that denotes perfect competition. Represent them diagrammatically.

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