Econ MA: 3/2/20 Example | SRTC= 100 Hoqty ky Fo of ne coer are can ( | “a TNSC * 30 F204 +4 a) ATC, Mc, ANS ATC = ae +20 +4, b) ange and find ANScmin = shut-down. (ats0 nc) Ae MceANSC mc = 20824 | pusc=Ser20r4, ANSC povda > 26% 23 2236 gut a aif---Ss at ie vat amine we 4 ANS Cmnt 20*2(6) #32 © "4 C) Write te supply curve for firm — invese n¢=20 424 > convert bo sugpry— P= 2982 eo ge fe) EY e(0) -10 a we need Supply cur’ 2 P-10 4? = Now Incorporate shut-down price _§ bro, P=3e BA O 5 esr d) Assume trere are 190 Frets wicite mavkek supply. W100 angie Ge 3 wwo(&-9) 1 PF* _S OP - 1009, PEsL io > Bese Joo(0) 7232.Qa ~ S SoP-looe, PZ32 ° Pe wsr e) Assume market demand Qv~ spp -10F, Find P*, A" 7 Equiliboriwen occurs where Qs= Ao Sok - 1900 = 5009 ~ lop P= S00D =I P oO | Gt? Pivg PP into etter Ox ov G9 -10 {16°) +7 24000 Qe = 5000 weer §) raw market and fem . FInd 477 ocars” MB= Me ina Markee ? 2 GF a MBE Me > 196+ 20 +24 780724 —a gH ) CFmd ATC (ATC ey evaluated at af) ates 18% +20+a, \ tc! = Tgp P20 ro =15reo 461.50 Draw and label iF. hh) Find prot are a’ (P*-ate") = Yo(loo - 6? rapier]‘ Mest r Fire MR sp MRue 40 4. Economic profit. Tw the LE, rms will enter marlett until econ profit =O = vanece MRE MC® ATC min Iw me SRA thie market has positive C) Find Pe Long - Ran equiltbrivm price ~ ATEmin MC > ATC J fem Uenn) perra = 2 egorg —a 42 OP my ate 100 —y q2!0 MrT ere Tad ee ATGmin = MCE evalvated at q>1o —> 20% 2Lio)~ Yo =ATCmiy > }) Find New marker @* —ruse previovs Demand, plug In r @o> GCO9- JOP —F @p=5000 -10(40) —4\Q) L) Hew many Rims are there in the LS oO: Nea" we fenow Q"=4G00,, 4 1° , a N= 2, | 409] Note: latqey than aed ams 4b Short “Ran