Question: You will use this information to answer this question PLUS the next three questions. Assume there are exactly 5firms in your market BUT (despite this)

You will use this information to answer this question PLUS the next three questions.

Assume there are exactly 5firms in your market BUT (despite this) the market isperfectly competitive.

The market demand function is Q = 270 - 2*P. The market supply function is Q = 15+ P.

All firms have the same ATC curve, and it is this:

ATC = 88- .66Q + .02Q2

Which of the following are the current market P and market Q in this market?

Multiple Choice

  • P = 65 and Q = 150
  • P = 85 and Q = 100
  • P = 75 and Q = 120
  • None of the above

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