Answer to Question #70043 in Economics of Enterprise for Melvin Muleya
a) What is the equilibrium quantity and price in this market given this information?
b) Given the answer in part (a) above, obtain the profit maximizing level of output, the total revenue, total cost and profit at the market equilibrium.
Is this a short run or long run equilibrium? Explain your answer.
c) Given your answer in (b) above, what do u think will happen in this market in the long run?
b) TR = P*Q = 517*367 = 189739
TC = 125 + 367^2+367 = 135181
PR = TR-TC = 189739-135181 = 54558
ATC = 125/Q+Q = 368
It is a short run, because P>ATC
c) It the long run in this market there may be surplus.
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