Answer to Question #85885 in Microeconomics for Ayanda Lubisi

Question

The market supply curves and market demand curves for books are given as follows:
Supply curve: P = 0.000002Q Demand curve: P = 11 – 0.00002Q
The short-run marginal cost curve: MC = 0.1 + 0.0009Q
The short-run equilibrium level of output is …
1. 1
2. 1 000
3. 10 000
4. 10 0000

Answer 1

In equilobrium Qd = Qs, so:

0.000002Q = 11 - 0.00002Q,

0.000022Q = 11,

Q = 500000 units.

So, the short-run equilibrium level of output in the industry is 500000.