Given the following equations:
Number of firms =85
Assume Income =11000.
i.What is the market supply equation?
ii.What is the market equilibrium price ?
iii.What is the market equilibrium quantity?
iv.What is the profit maximizing output (PMO) level?
v.What is the average profit and total profit at this PMO level?
1. What is the market supply equation?
A perfectly competitive firm sets its output such that MC=P
There are 85 similar firms in the market. So, Market supply will be given by
2. What ...
The solution describes the steps to find out equilibrium price , equilibrium quantity, profit maximizing output level, average and total profit at PMO level in case of perfectly competitive market.