A competitive industry consists of 100 firms. The short-run marginal cost curve for each firm is given by MC = 200 + .3Q. The demand curve faced by the industry is given as P = 400 - .1Q. What is the producer surplus for each firm?
What will be an ideal response?
(150 × 5)/2 = 375. The point here is that producer surplus can be made even if no economic profit is made. It is no coincidence that the producer surplus is equal to the fixed cost.
Economics
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What determines prices and inflation in the long-run classical model?
A. money supply B. aggregate demand and supply C. interest rates D. saving and investment
Economics
Climate change is a geographical phenomenon; it refers to changes in the distribution of climatic events, such as temperature or the likelihood of tornadoes. Why is it important for economists to study climate change?
What will be an ideal response?
Economics