Re: jnu

Posted by Khushboo on May 08, 2009; 12:22pm
URL: http://discussion-forum.276.s1.nabble.com/jnu-tp2844632p2844981.html

In a competitive firm, P=MC
MC= 2q+4
P= 2q+4 is the firm supply curve
Hence the industry supply curve is Q= 100q = 100/2 (P-4) = 50P-200.
Industry demand is Q=100-10P
By equating demand and supply we get, P=5. So Q=50 and q=1/2

For the firms to survive, TR - TC >_ 0
                                5/2 - [ (1/2)(1/2) + 4(1/2) +K ] >_ 0
                              so,  K <_ 1/4