Answer to Question #70055 in Economics of Enterprise for Melvin Muleya
d) In this market, what is the long run equilibrium price and what is the long run equilibrium quantity for Coca-Cola Company to produce? Explain your answer.
e) Given the long run equilibrium price calculated in part (d) above, how many units of the coca-cola products are produced in this market?
d) The long run equilibrium price and quantity are at point where P = MC = ATC = TC/q, so:
2q + 1 = 125/q + q +1,
q = 125/q,
q^2 = 125,
q = 11.2 units.
P = ATC = 125/11.2 + 11.2 + 1 = $23.36
e) Given the long run equilibrium price P = $23.36 calculated in part (d) above the number of the coca-cola products produced in this market is:
23.36 = 150 + Q,
Q = -126.64, so no coca-cola products are produced in this market.
Need a fast expert's response?Submit order
and get a quick answer at the best price
for any assignment or question with DETAILED EXPLANATIONS!