Asked by jennifer
The hand made snuffbox industry is composed of 100 identical firms, each having short-run total costs given by
STC=0.5q^2+10q+5 and short-run marginal costs by SMC=q+10 where q is the output of snuffboxes per day.
a. What is the short-run supply curve for each snuffbox maker? What is the short-run supply curve for the market as a whole?
b. Suppose the demand for total snuffbox production is given by Q=110-50P What is the equilibrium in this marketplace? What is eachfirms total shortrun profit?
STC=0.5q^2+10q+5 and short-run marginal costs by SMC=q+10 where q is the output of snuffboxes per day.
a. What is the short-run supply curve for each snuffbox maker? What is the short-run supply curve for the market as a whole?
b. Suppose the demand for total snuffbox production is given by Q=110-50P What is the equilibrium in this marketplace? What is eachfirms total shortrun profit?
Answers
Answered by
economyst
a) the short-run supply for each maker is their MC curve, The supply curve for the industry is the sum of the supply curves from each firm dis-regarding the constant, so... supply = 100q+10
b) given your demand equation, there is no equilibrium value with a positive production level.
b) given your demand equation, there is no equilibrium value with a positive production level.
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