# FIRM'S SUPPLY AND DEMAND

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## FIRM'S SUPPLY AND DEMAND

 Mkt dd curve Q=1500-50P long run operating costs are TC=0.5q^2-10q ss curve for entrepreneurs is Q=0.25w w=wage rate each firm requires 1 entrepreneurs i.e qty of entrepreneurs hired= no. of firms long run tc for each firm ; TC=0.5q^2-10q+w a) find long run euilibrium qty produced. qty prduced by each firm ? equilibrium price ? no of entrepreneurs hired and their wage rate ? no. of firms ? b) demand shifts outward to Q-2428-50P how will your ans change? c)entrepreneurs responsible for upward sloping ss curve so they will receive rents generated...calculate the rents in part a and part b. show that these are equal to the value of producer surplus generated. please answer this query asap...m really confused abt how to solve this....
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## Re: FIRM'S SUPPLY AND DEMAND

 Hey, for the first part price in the long run equilibrium will be minimum of average cost. So minimize 0.5q-10+w/q wrt q. U get q=root(2w). Min AC comes out to be root(2w)-10. This is the price. From here get quantity demanded in terms of w. Quantity supplied is 0.25w.root(2w). Equate them to get w. U can get the other variables from there. Now see if u can do the other parts.