industry for flour tortillas in Denver is perfectly competitive, economics homework help

User Generated

elnag

Economics

Description

Assume that the industry for flour tortillas in Denver is perfectly competitive. There are 200 firms. 75 of the firms are “high-cost,” with short-run supply curves QHC = 5P, while the others are “low-cost,” with short-run supply curves QLC = 8P. Quantities are measured in dozens of tortillas and prices in dollars Answer the following questions:

a. Derive the short-run industry supply curve for tortillas [2 marks]

b. Assume the market demand curve for tortillas is given by QD = 10,000 – 625P. Find the market equilibrium price and quantity. [1 mark]

c. At this price, how many dozens of tortillas are produced by the high- and low-cost firms, respectively? [2 marks]

d. Determine total industry surplus at the equilibrium. [2 marks]

User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

100% Correct answers. If you have other questions, just let me know

Economics Questions solutions
Assume that the industry for flour tortillas in Denver is perfectly competitive. There are
200 firms. 75 of the firms are “high-cost,” with short-run supply curves QHC = 5P, while
the ...


Anonymous
I use Studypool every time I need help studying, and it never disappoints.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Related Tags