In the following question, all dollar values are expressed in thousands of dollars. Suppose that the total city-wide demand function for private school seats Q is given by: Q(p) = 24710 - 2500p
Each private school's long run total cost function is given by: TC(q) = 900 + 0.655q^(4/3).
Then, each private school's marginal cost function is given by MC(q)=(4/3)x0.655q^(1/3)
A) Calculate the average cost AC(q)
B) In order for the private school market to be in long run equilibrium, how many children are served in each private school? What is the tuition (per seat in the school) charged in each private school?
C) How many private schools are operating?