dsetypetest

[Shruti]

Hi, can anyone explain this?

A competitive industry faces the demand x = 865 – 5p
Where x is the industry output and p is the price of the product. There are n firms having identical
cost conditions Ci = 144 + 5xi +4xi
2 where xi is the output of firm i and Ci is its total cost. There is
free entry and large number of potential entrants.
Equilibrium output and price of the industry is
a) (x, p) = (690, 35)
b) (x, p) = (600, 53)
c) (x, p) = (515, 70)
d) None of the above
32. In the preceding question, number of firms who will enter the industry is
a) 115
b) 100
c) 90
d) None of the above

[duck]

Hi shruti.. :)

its (x,p) = (600, 53)

and n = 100

[Shruti]

Hey thanks 4 the answers... but i need to know how u solved it..

[Amit Goyal]

Use MC = AC to determine x_i. And then substitute it in MC. Then use p = MC to determine price. And then substitute the p in demand to solve for x. Number of firms  = x/x_i

[Shruti]

thankyou sir :)