Hello, Can you help layout e, f, and g of the problem described here. Suppose th

Question

Hello,

Can you help layout e, f, and g of the problem described here.

Suppose that the monthly market demand schedule for Frisbees is Suppose further that the marginal and average costs of Frisbee production for every competitive firm are Finally, assume that the equilibrium market price is $6 per Frisbee 105 (a) Draw the cost curves of the typical firm. (b) Draw the market demand curve and identify market equilibrium. (c) How many Frisfoces are being sold in equilibrium? (d) How many (identical) firms are initially producing Frisbees? (e) How much profit is the typical firm making? (f) In view of the profits being made, more firms will want to get into Frisbee production. In the long run, these new firms will shift the market supply curve to the right and push the price down to minimum average total cost, thereby eliminating profits. At what equilibrium price are all profits eliminated? (g) How many Anns will be producing Frisbees at this price? Practice quizzes, student Power Points, author podcasts, web activities, and additional materials available at www.mhhe.com/schilleressentials9e, or scan here. Need a barcode reader? Try SconLife, available in your app store.

Explanation / Answer

E) Profit typical firm making

Profit=$1000

Selling 500 frisbees at $6 generate TR=$3000. TC at $4 selling 500 frisbees is $2000.

F & G) Long Run equals =minimum ATC. $2 Profits equals to =Zero. At this price 64000 units are demanded individual firms produce 100 units. Thus there will be 640 firms in the industry in the Long run.

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.