Market demand is given as Q_D= 110 - 2P.Market supply is given as Q_S= 3P + 10.Each identical firm has MC = 10Q and ATC = 5Q.What quantity of output will a typical firm produce

Question

Quizplus · Accepted Answer

In equilibrium, QD = QS. Solving 110 - 2P = 3P + 10 gives P = 20. Substituting P = 20 into either QD or QS gives Q = 70. Each firm produces where MC = P, so 10Q = 20, thus Q = 2.

Market Demand Is Given as QD = 110 - 2P

Market Demand Is Given as Q_D= 110 - 2P