Suppose there are n identical firms in a market. Each firm has fixed cost equal

Question

Suppose there are n identical firms in a market. Each firm has fixed cost equal to 392, and variable cost given by VC = 2q^2, where q is the amount that an individual firm produces. This means that an individual firm’s marginal cost is given by MC = 4q. Also, the market demand is given by
P = 1148 – 3Q, where Q is the total amount of the good produced by all of the firms combined. Therefore, Q = n*q.

How much output will each of them produce?

What will be the market price?

How many firms will there be in long run equilibrium?

Explanation / Answer

FC = 392 Vc = 2qˆ2 MC = 4q P = 1148 – 3Q for optimum output MC= MR 4q= 1148 – 3nq q=1148/(4+3n) ANSWER For market price P = 1148 – 3(1148n/(4+3n)) ANSWER for no. of firms (392 + 2qˆ2)/q = 1148 – 3qn answer substituter q from answer 1 and get n then substitute n in all the answers to get values Please rate appreciated

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