Urgent help for an Economic Problem required (Industrial Organisation)
A perfectly competitive industry has a large number of potential entrants. Each firm has an identical cost structure given by: C(qi) = 0.5qi² − 10qi + 200, where qi is the individual quantity. Total market demand is Q = 1500 – 50p, where Q is aggregate quantity and p is the market price. Answer the following:
1) What is the industry’s supply schedule? Explain.
2) What is the long-run price, P* individual quantity, qi* aggregate quantity ,Q* number of firms in the economy, N*, the level of economic profits and surplus of consumers? Explain.
Consider a monopolist that must choose both price (or quantity) and quality for its product. It faces a demand P = Z(θ − Q), where P is the price of the good, Z is an index of quality, θ > 0 is a parameter and Q is the quantity of output. Assume that the marginal cost of quantity is zero and that the cost of production of quality is D(Z) = αZ2
1) Compute the quantity, the quality and the price of output in equilibrium. Explain.
2) Does the monopolist produce too high or too low quality? Explain.
3) Demonstrate your answer to question 2) analytically. Explain.
Re: Urgent help for an Economic Problem required (Industrial Organisation)
What do you mean by "help"? Surely you don't just want someone to do the problem for you? You won't learn anything from that! So what do you know and what have you done so we can carry on? Can you at least state the definition of things like "industry's supply schedule", "aggregate quantity", etc.