Purchase Solution

Detemining equilibrium price and quantity of boxes

Not what you're looking for?

Ask Custom Question

In 2001, the box industry was perfectly competitive. The lowest point on the long-run average cost curve of each of the identical box producers was $4, and this minimum point occurred at an output of 1,000 boxes per month. The market demand curve for boxes was

Qd = 140,000 - 10,000P

where P is the price of a box (in dollars per box) and Qd is the quantity of boxes demanded per month. The market supply curve for boxes was

Qs = 80,000 + 5,000P

where Qs is the quantity of boxes supplied per month.

a. What is the equilibrium price of a box? Is this the long-run equilibrium price?

b. How many firms are in this industry when it is in long-run equilibrium?

Purchase this Solution

Solution Summary

Solution describes the steps for detemining equilibrium price and quantity for boxes. It studies whether it is long run equilibrium point.

Solution Preview

Solution

a. What is the equilibrium price of a box? Is this the long-run equilibrium price?
For equilibrium ...

Solution provided by:
Education
  • 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.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economics, Basic Concepts, Demand-Supply-Equilibrium

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

Basics of Economics

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

Economic Issues and Concepts

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