Market demand is given as Q_D= 40 - P.Market supply is given as Q_S= 3P.Each identical firm has MC = 5Q and ATC = 3Q.What quantity of output will a typical firm produce

Question

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To find the quantity produced by a typical firm, set MC equal to the market price. First, find the equilibrium price by setting QD = QS: 40 - P = 3P, solving gives P = 10. Then, set MC = 5Q equal to 10, solving gives Q = 2.

Market Demand Is Given as QD = 40 - P

Market Demand Is Given as Q_D= 40 - P