The daily demand for pizzas is Qd = 750 - 25P, where P is the price of

Question:

The daily demand for pizzas is Qd = 750 - 25P, where P is the price of a pizza. The daily costs for a pizza company initially include $50 in fixed costs (which are avoidable in the long run but sunk in the short run), and variable costs equal to VC = Q2/2, where Q is the number of pizzas produced in a day. Suppose that in the long run there is free entry into the market. Assume fixed costs fall to $18, what is the short run market equilibrium? What is the market equilibrium in the long run?
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Microeconomics

ISBN: 978-1118572276

5th edition

Authors: David Besanko, Ronald Braeutigam

Question Posted: