A perfect competitive industry faces a demand curve represented by Q =

Question

A perfect competitive industry faces a demand curve represented by Q = 10,000 – 10P. Also suppose that an individual firm belonging to that industry faces a marginal cost function given by

MC (Q) = 4Q + 100

Here Q represents quantity of output produced and P is the price. What would be the equilibrium market price? How much does each firm produce in equilibrium? and also find how many firms would be there in the industry in the long run

09 Feb 2021

Answer :

Word Count : 520

To determine the equilibrium market price, quantity produced by each firm in equilibrium, and the number of firms in the industry in the long run in a perfectly competitive market, we need to consider the conditions of profit maximization for the individual firm and the overall market.

### Equilibrium Market Price:

In a perfectly competitive market, each firm is a price taker, meaning it takes the market price as given and cannot influence it. The equilibrium occurs where the market demand equals the market supply. The ____ ______ ______ _____ ________ ________ _______.
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