Question #108609

Consider the model of a market with four identical producers. Each producer has the same constant average variable cost. The aggregate demand for the product these firms produce is Y=1000.p-5. The producers choose their quantities simultaneously and the price is the highest price p at which the total quantity can be sold. The price at the equilibrium of this model is 20. What is the value of the firms’ constant average variable cost?

Expert's answer

"Y'=-5\u00d7\\frac {1000}{p^6};"

"Y'=\\frac {-5000}{p6};"

"Y'=\\frac {-5000}{20^6};"

"-5000\u00d74=-20000;"

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