Question

Supppose the market demand for milk is qd=150-5p. additionally suppose that a dairys variable costs are vc=2q^2 (where q is the number of gallons of milk produced each day), its margianal cost is mc=4q and there is an avoidable fixed cost of $50 per day. in the long run there is free entry into the market. suppose the demand for milk doubles. if in the short run the number of firms is fixed and their fixed costs are sunk, how much does each of the active firms produce in the short run equilibrium?

a.) 20 units

b.) 10 units

c.) 5 units

d.) 6 units

Answer 1

??????????????????vvvvvvvvvvvvvvvv