firms in compeitive markets
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Suppose a firm in a perfectly competitive industry has the short run cost function tc=100 + q2 with the corresponding marginal cost curve of mc=2q
1)if the market price is $30 what is the profit maximizing output level for each firm? What is the profit of the firm?
2) what would be the competitive equilibrium price in this industry?
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Solution Summary
The firms in competitive markets are examined. The competitive equilibrium price in the industry are given.
Solution Preview
For perfect competition, the profit max. rule is p=mc
1) p = 30 = 2q = MC, ...
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