Average total and marginal cost functions


Problem: Fifteen competitive gadget makers each have the following cost structure:

Ci = 0.1qi2 + 2qi + 160i = 1,2,3.....15

(1) Determine the average fixed, average variable, average total and marginal cost functions.

(2) What is the short-run supply curve for each firm?

(3) What is the market supply curve?

(4) If market demand is q = 850 - 25p show that the equilibrium market price and quantity is both a long and short run equilibrium.

(5) If market demand shifts down to q = 650 - 25p what will be the short run market equilibrium price and quantity?

(6) What will market price and quantity be in the long run under the lower demand as in (e) above?

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Macroeconomics: Average total and marginal cost functions
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