Use the information given to complete the table below Number

Use the information given to complete the table below Number of Firm output, Market Price, p output, Q 96 128 160 175 elasticit 2.53 1.65 1.12 0.94 Market Residual demand Lerner elasticit 2.53 3.30 5.59 9.42 firms, n Index 96 64 32 17.5 243 0.30 0.18 0.11 179 10 164.45 Marginal Cost is a constant, S147.00. Round answers to two decimal places, if necessary. The number of firms should be entered as an integen

Solution

Number of firms n

Firm output q

Market output Q

Price P

Market Elasticity

Residual Demand elasticity

Lerner index

1

96

96

243

-2.53

-2.53

0.4

2

64

128

211

-1.65

-3.30

0.30

5

32

160

179

-1.12

-5.59

0.18

10

17.5

175

164.45

-0.94

-9.42

0.11

Number of firms = Market output / firm output = 160/32 =5

Price = Market Elasticity* Market output = 1.65*128 =211

Lerner Index = 1/ Mod of Residual Demand elasticity = 1/(2.53) =0.395=0.4

Number of firms n	Firm output q	Market output Q	Price P	Market Elasticity	Residual Demand elasticity	Lerner index
1	96	96	243	-2.53	-2.53	0.4
2	64	128	211	-1.65	-3.30	0.30
5	32	160	179	-1.12	-5.59	0.18
10	17.5	175	164.45	-0.94	-9.42	0.11