Suppose that the long-run total cost function for the typical mushroom producer is given by:
TC=wq2 -10q+100
Where q represents the output of the typical firm and w represents the hourly wage rate mushroom pickers. The market for mushrooms is perfectly competitive. Suppose also that the demand for mushrooms is given by
Q= -1000p+35,000
Where Q is the total quantity demand and P is the market price of mushrooms.

1.   If the wage rate for mushroom pickers is $4.00, what will be the long-run equilibrium output for the typical mushroom picking firm? (15 Points)

Answer rating: 100% (QA)

To determine the longrun equilibrium output for the typical mushroom picking firm we need to find th... View the full answer