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    The market equilibrium

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    Suppose the marginal social cost of television sets is $100. This is constant and equal to the average cost of television sets. The annual demand for television sets is given by the following equation: Q = 200,000 - 500P2. If television sets are sold in a perfectly competitive market, calculate the annual number sold. Under what circumstances will the market equilibrium be efficient? See the attached file.

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    Solution Preview

    Q = 200000 - 500*100 = 150,000 televisions

    The market equilibrium is efficient if ...

    Solution Summary

    The market equilibrium is assessed.