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Table 3 given in the following page describes the long run cost schedules for a typical firm in a given industry operating under perfect competition and without positive or negative external economies. Table 4 gives the demand schedule for the product of this industry. a) Fill out the missing entries in the table b) Plot the long run average total cost and marginal cost curves for the typical firm. Plot the supply curve for the typical firm on a second diagram. Plot the demand schedule for the whole industry on a third diagram. c) Currently the number of firms in the industry is 16. They all enjoy the same cost schedules given in Table 3. What is the equilibrium price? (Hint construct the market supply curve and plot it on the same diagram as the demand curve) d) What will happen to the number of firms in the long run? What are the basic economic forces and the characteristics of competitive markets that justify your answer? e) What is the long run equilibrium price and long run equilibrium quantity demanded and supplied? What is the number of firms at the long run equilibrium? Table 3 Cost Schedule for one firm Quantity MC ATC TC 0 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 8.5 ඒ 26 17 13.25 10 7.25 5 3.25 2 1.25 1 1.25 2 3.25 5 7.25 10 13.25 9 17 9.5 21.25 10 10.5 26 31.25 0 21.33 28.87 34.66 38.95 42 44.0 45.33 46.12 46.66 47.20 48 49.29 51.33 54.37 58.66 64.45 72 81.54 93.33 107.62 Table 4 Demand Quantity Price 0 26 24.75 23.5 22.25 21 19.75 18.5 17.25 16 10 20 30 40 50 60 70 80 90 100 110 120 128 140 150 160 170 180 190 200 14.75 13.5 12.25 11 10 8.5 7.25 6 4.75 3.5 2.25 1 3

Table 3 given in the following page describes the long run cost schedules for a typical firm in a given industry operating under perfect competition and without positive or negative external economies. Table 4 gives the demand schedule for the product of this industry. a) Fill out the missing entries in the table b) Plot the long run average total cost and marginal cost curves for the typical firm. Plot the supply curve for the typical firm on a second diagram. Plot the demand schedule for the whole industry on a third diagram. c) Currently the number of firms in the industry is 16. They all enjoy the same cost schedules given in Table 3. What is the equilibrium price? (Hint construct the market supply curve and plot it on the same diagram as the demand curve) d) What will happen to the number of firms in the long run? What are the basic economic forces and the characteristics of competitive markets that justify your answer? e) What is the long run equilibrium price and long run equilibrium quantity demanded and supplied? What is the number of firms at the long run equilibrium? Table 3 Cost Schedule for one firm Quantity MC ATC TC 0 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 8.5 ඒ 26 17 13.25 10 7.25 5 3.25 2 1.25 1 1.25 2 3.25 5 7.25 10 13.25 9 17 9.5 21.25 10 10.5 26 31.25 0 21.33 28.87 34.66 38.95 42 44.0 45.33 46.12 46.66 47.20 48 49.29 51.33 54.37 58.66 64.45 72 81.54 93.33 107.62 Table 4 Demand Quantity Price 0 26 24.75 23.5 22.25 21 19.75 18.5 17.25 16 10 20 30 40 50 60 70 80 90 100 110 120 128 140 150 160 170 180 190 200 14.75 13.5 12.25 11 10 8.5 7.25 6 4.75 3.5 2.25 1 3

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Table 3 given in the following page describes the long run cost schedules for a typical firm in a given industry operating under perfect competition and without positive or negative external economies. Table 4 gives the demand schedule for the product of this industry. a) Fill out the missing entries in the table b) Plot the long run average total cost and marginal cost curves for the typical firm. Plot the supply curve for the typical firm on a second diagram. Plot the demand schedule for the whole industry on a third diagram. c) Currently the number of firms in the industry is 16. They all enjoy the same cost schedules given in Table 3. What is the equilibrium price? (Hint construct the market supply curve and plot it on the same diagram as the demand curve) d) What will happen to the number of firms in the long run? What are the basic economic forces and the characteristics of competitive markets that justify your answer? e) What is the long run equilibrium price and long run equilibrium quantity demanded and supplied? What is the number of firms at the long run equilibrium? Table 3 Cost Schedule for one firm Quantity MC ATC TC Or 0 1 1.5 13.25 223344556677 2.5 3.5 4.5 5.5 6.5 7.5 8 。066∞∞ 26 17 9 9.5 29 10 7.25 5 3.25 2 1.25 1 1.25 235 10 8.5 13.25 3.25 7.25 63722 17 21.25 10 26 10.5 31.25 0 21.33 28.87 34.66 38.95 42 44.0 45.33 46.12 46.66 47.20 48 49.29 51.33 54.37 58.66 64.45 72 81.54 93.33 107.62 Table 4 Demand Quantity Price 0 10 20 30 40 50 60 70 80 90 100 110 120 128 140 150 160 170 180 190 200 26 24.75 23.5 22.25 21 19.75 18.5 17.25 16 14.75 13.5 12.25 11 10 8.5 7.25 6 4.75 3.5 2.25 1 3
Transcribed Image Text:Table 3 given in the following page describes the long run cost schedules for a typical firm in a given industry operating under perfect competition and without positive or negative external economies. Table 4 gives the demand schedule for the product of this industry. a) Fill out the missing entries in the table b) Plot the long run average total cost and marginal cost curves for the typical firm. Plot the supply curve for the typical firm on a second diagram. Plot the demand schedule for the whole industry on a third diagram. c) Currently the number of firms in the industry is 16. They all enjoy the same cost schedules given in Table 3. What is the equilibrium price? (Hint construct the market supply curve and plot it on the same diagram as the demand curve) d) What will happen to the number of firms in the long run? What are the basic economic forces and the characteristics of competitive markets that justify your answer? e) What is the long run equilibrium price and long run equilibrium quantity demanded and supplied? What is the number of firms at the long run equilibrium? Table 3 Cost Schedule for one firm Quantity MC ATC TC Or 0 1 1.5 13.25 223344556677 2.5 3.5 4.5 5.5 6.5 7.5 8 。066∞∞ 26 17 9 9.5 29 10 7.25 5 3.25 2 1.25 1 1.25 235 10 8.5 13.25 3.25 7.25 63722 17 21.25 10 26 10.5 31.25 0 21.33 28.87 34.66 38.95 42 44.0 45.33 46.12 46.66 47.20 48 49.29 51.33 54.37 58.66 64.45 72 81.54 93.33 107.62 Table 4 Demand Quantity Price 0 10 20 30 40 50 60 70 80 90 100 110 120 128 140 150 160 170 180 190 200 26 24.75 23.5 22.25 21 19.75 18.5 17.25 16 14.75 13.5 12.25 11 10 8.5 7.25 6 4.75 3.5 2.25 1 3
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