In the robotics industry there are 100 firms. Each firm shares the same long-run cost function. It is: The relevant marginal cost function is Each of the 100 firms produce 64 units. The market demand for robotics is: Calculate the market price at this production level. Also, calculate the profits for a representative firm in the robotics industry. If one firm expanded production to 100 units while the remaining 99 firms kept output at 64 units, what would happen to the market price and profits? Would all firms benefit or lose if every firm expanded output to 100 units?

Question

In the robotics industry there are 100 firms. Each firm shares the same long-run cost function. It is:  The relevant marginal cost function is  Each of the 100 firms produce 64 units. The market demand for robotics is:  Calculate the market price at this production level. Also, calculate the profits for a representative firm in the robotics industry. If one firm expanded production to 100 units while the remaining 99 firms kept output at 64 units, what would happen to the market price and profits? Would all firms benefit or lose if every firm expanded output to 100 units?

Quizplus · Accepted Answer

The Answer of In the robotics industry there are 100 firms. Each firm shares the same long-run cost function. It is:  The relevant marginal cost function is  Each of the 100 firms produce 64 units. The market demand for robotics is:  Calculate the market price at this production level. Also, calculate the profits for a representative firm in the robotics industry. If one firm expanded production to 100 units while the remaining 99 firms kept output at 64 units, what would happen to the market price and profits? Would all firms benefit or lose if every firm expanded output to 100 units?

In the Robotics Industry There Are 100 Firms