Re: Doubts

Posted by Rautparul on Jan 31, 2017; 8:17am
URL: http://discussion-forum.276.s1.nabble.com/Doubts-tp7603095p7603141.html

Hi, I have doubt in this question. I got 2 prices as 4 and 2 but the answer is 3. Can anybody tell how?

Two firms constitute the entire doghouse industry. One has a long run cost curve of
3 + 4(y^2)/3) and the other has a long run cost curve of 10 + (y^2/10). If no new firms enter the
industry, at which of the following prices will exactly one rm operate?
(a) 1
(b) 3
(c) 5
(d) 7
(e) None of the above.