There are 80 perfectly competitive firms producing love letters, q. Each firm's cost function is C(q) = 4 + 4q² Market demand for love letters is QD = 240 - 5P. Use this information to answer questions #20 and #21. 20. What is the short-run market equilibrium price for love letters? a. P = $8 b. P = $10 c. P = $16 d. P= $18.50 e. P = $24 21. What will happen to the number of firms selling love letters in the long-run? a. The number of firms in this market will decrease. b. The number of firms in this market will increase. FRI

There are 80 perfectly competitive firms producing love letters, q. Each firm's cost function is C(q) = 4 + 4q² Market demand for love letters is QD = 240 - 5P. Use this information to answer questions #20 and #21. 20. What is the short-run market equilibrium price for love letters? a. P = $8 b. P = $10 c. P = $16 d. P= $18.50 e. P = $24 21. What will happen to the number of firms selling love letters in the long-run? a. The number of firms in this market will decrease. b. The number of firms in this market will increase. FRI

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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