Homework SourseProduct Price Quantity Supplied Profit or Loss 72 8 24600
Product Price
Quantity Supplied
Profit (+) or Loss (-)
$72
8
$246.00
52
7
$104.00
45
6
$60.00
28
5
-$35.00
22
Shutdown
15
Shutdown
Assume there are 500 identical firms in this industry, that they have identical cost data as the firm above, and that the industry demand schedule is as follows:
Product Price
Quantity Demanded
Quantity Supplied
$72
2500
52
3500
45
4000
28
5200
22
5900
15
6700
(e) What will the equilibrium price be?
(f) What will the equilibrium output for each firm be?
(g) What will profit or loss be per unit?
(h) What will profit or loss be per firm?
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Solution
e)
Equilibrium price will be where demand equals supply this is true at a price of $52.
f)
Equilibrium quantity will be where demand equals supply at a total quantity of 3500 and individual quantity of 7 units.
g)
Profit per unit will be 104/7=14.85
h)
Profit per firm will be $104.
| Product Price | Quantity Demanded | Individual Quantity | Quantity Supplied=500*individual quantity |
| 72 | 2500 | 8 | 4000 |
| 52 | 3500 | 7 | 3500 |
| 45 | 4000 | 6 | 3000 |
| 28 | 5200 | 5 | 2500 |
| 22 | 5900 | Shutdown | Shutdown |
| 15 | 6700 | Shutdown | Shutdown |
