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    Short and Long Run equilibrium price and output level

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    The Amber Corporation total cost function (where TC is the total cost in dollars and Q is quantity) is
    TC = 200 + 4Q + 2Q^2

    a. If this firm is perfectly competitive and the price of its product is $24, at what quantity will the firm choose to produce?
    b. Does the answer represent a short-run equilibrium or a long-run equilibrium? Explain.
    c. If the answer is for short-run equilibrium, calculate the long-run price and quantity for this firm.

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    https://brainmass.com/economics/general-equilibrium/short-long-run-equilibrium-price-output-level-235109

    Solution Preview

    Output Level
    Solution:

    a. If this firm is perfectly competitive and the price of its product is $24, at what quantity will the firm choose to produce?

    TC=200+4Q+2Q^2
    Marginal Cost=MC=4+4Q
    In perfect competition, MC=Price
    So, ...

    Solution Summary

    Solution describes the steps for calculating profit maximizing output of a perfectly competitive firm at prevailing market price. It also calculates short and long equilibrium price and quantity or the firm.

    $2.19

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