P10.5 Perfectly Competitive Firm and Industry Supply. New England Textiles, Inc., is a medium-… 1 answer below »

P10.5 Perfectly Competitive Firm and Industry Supply. New England Textiles, Inc., is a medium- sized manufacturer of blue denim that sells in a market for which it is perfectly competitive. The total cost function for this product is described by the following relation:

 

TC  =  $25,000  +  $1Q  +  $0.000008Q2:

MC  =  DTC/DQ  =  $1  +  $0.000016Q

 

where Q is square yards of blue denim produced per month.

A.   Derive the firm’s supply curve, expressing quantity as a function of price.

B.    Derive the industry’s supply curve if New England Textiles is one of 500 competitors.

C.    Calculate industry supply per month at a market price of $2 per square yard.

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