Re: ISI ME II 2014

Posted by Spiti on Apr 20, 2014; 4:26pm
URL: http://discussion-forum.276.s1.nabble.com/ISI-ME-II-2014-tp7587168p7587488.html

Once the patent expires, firms can freely enter and exit the drug market.
So in long run p= min AC which can be obtained by AC=MC or AC'=0, which comes out at X=5,
so p=25/X + X => p=10
Total market output is Xm=100-X=90
Xm = no of firms * output of each firm...