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(Solved): Suppose the market for cat food is perfectly competitive, with each firm having the total cost func ...




Suppose the market for cat food is perfectly competitive, with each firm having the total cost function \( T C(Q)=48 Q-\frac{
Suppose the market for cat food is perfectly competitive, with each firm having the total cost function \( T C(Q)=48 Q-\frac{4}{5} Q^{2}+\frac{1}{100} Q^{3} \), where \( Q \) is the firm's output of cat food in tens of pounds. The associated average cost and marginal cost functions are \( A C(Q)=48-\frac{4}{5} Q+ \) \( \frac{1}{100} Q^{2} \) and \( M C(Q)=48-\frac{8}{5} Q+\frac{3}{100} Q^{2} \). Total demand in the market is given by \( D(P)= \) \( 48000-40 P \), where \( P \) is the price of ten pounds of cat food. Find the long run competitive equilibrium in the cat food market, i.e. the equilibrium price, quantity supplied by each firm and number of firms operating in the market.


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Average Cost is , AC=48?45Q+1100Q2 min AC By f.o.c, dACdQ=0??45+2100Q=0?Q50=45?Q=45×50=40 Firm's long run equilibrium quantity = 40
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