Suppose Glen’s Grinders, LLC is a retail outlet that sells meat grinders for household use and operates in a perfectly competitive market where there is a total of 10 firms in this market including Glen’s Grinders. Basically, all the firms in this competitive market have technologies (production and cost conditions) that are the same as Glen’s. Suppose Glen’s total cost function is given by: C(q) =100 + 25q + q^2 a. Calculate Glen’s optimal output level and profits if the monthly market inverse demand for units of the product is stable and given by: P= 250 - Q b. If Glen is typical of the firms in this industry (same as the other 9), calculate the long-run equilibrium output, price, and profit level that will ultimately prevail in this industry.
Suppose Glen’s Grinders, LLC is a retail outlet that sells meat grinders for household use and operates in a perfectly competitive market where there is a total of 10 firms in this market including Glen’s Grinders. Basically, all the firms in this competitive market have technologies (production and cost conditions) that are the same as Glen’s. Suppose Glen’s total cost function is given by: C(q) =100 + 25q + q^2 a. Calculate Glen’s optimal output level and profits if the monthly market inverse demand for units of the product is stable and given by: P= 250 - Q b. If Glen is typical of the firms in this industry (same as the other 9), calculate the long-run equilibrium output, price, and profit level that will ultimately prevail in this industry.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose Glen’s Grinders, LLC is a retail outlet that sells meat grinders for household use and operates in a perfectly competitive market where there is a total of 10 firms in this market including Glen’s Grinders. Basically, all the firms in this competitive market have technologies (production and cost conditions) that are the same as Glen’s. Suppose Glen’s total cost function is given by: C(q) =100 + 25q + q^2
a. Calculate Glen’s optimal output level and profits if the monthly market inverse demand for units of the product is stable and given by: P= 250 - Q
b. If Glen is typical of the firms in this industry (same as the other 9), calculate the long-run equilibrium output, price , and profit level that will ultimately prevail in this industry.
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