Market demand is given as Q_D= 60 - P.Market supply is given as Q_S= 3P.Each identical firm has MC = 3Q and ATC = 1.5Q.What is a firm's profit

Question

Quizplus · Accepted Answer

To find the firm's profit, first find the equilibrium price and quantity by setting QD = QS: 60 - P = 3P, solving gives P = 15 and Q = 45. Each firm's MC = 3Q, so Q = 5 for each firm (since MC = P = 15). Total revenue (TR) = P * Q = 15 * 5 = 75. Total cost (TC) = ATC * Q = 1.5 * 5 * 5 = 37.5. Profit = TR - TC = 75 - 37.5 = 37.5.

Market Demand Is Given as QD = 60 - P

Market Demand Is Given as Q_D= 60 - P