Purchase Solution

Deriving short run supply curve

Not what you're looking for?

Ask Custom Question

Carolina Textiles, Inc., is a small manufacturer of cotton linen that it sells in a perfectly competitive market. Given $100,000 in fixed costs per day, the daily total cost function for this product is described by:

TC = $100,000 + $2Q + $0.0625Q2

MC = dTC/dQ = $2 + $0.125Q

where Q is units of cotton linen produced per day. Assume that MC > AVC at every point along the firm's marginal cost curve, and that total costs include a normal profit.

A. Derive the firm's supply curve, expressing quantity as a function of price.
B. Derive the market supply curve if North Carolina Textiles is one of 1,000 competitors.
C. Calculate market supply per day at a market price of $47 per unit.

Purchase this Solution

Solution Summary

Solution describes the steps to find short run supply curve of a firm and market in the perfectly competitive market.

Solution Preview

A. Derive the firm's supply curve, expressing quantity as a function of price.

A perfectly competitive firm sets its output level such that Marginal ...

Solution provided by:
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
Recent Feedback
  • "Thank you"
  • "Really great step by step solution"
  • "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
  • "Thanks Again! This is totally a great service!"
  • "Thank you so much for your help!"
Purchase this Solution

Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.