# A firm sells its product in a perfectly competitive market where other firms charge a price of...

## Question:

A firm sells its product in a perfectly competitive market where other firms charge a price of $70 per unit. The firm's total costs are C(Q)=50+10Q+2Q{eq}^2 {/eq}.

a. How much output should the firm produce in the short run?

b. What price should the firm charge in the short run?

c. What are the firm's short-run profits?

## Perfect competition

Perfect competition is a market structure where a large number of consumers and suppliers determine the market price and quantity collectively. In this market, individual firms have no control over the prevailing market price. As a result, firms are called price takers.

## Answer and Explanation: 1

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View this answera) Short-run output:

In the below solution, P and Q are the price and quantity of the commodity respectively.

{eq}\begin{align*} P &= 70\\ R\left(...

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Chapter 3 / Lesson 63Learn the definition of perfect competition and understand how a perfectly competitive market works. Study the characteristics of a perfectly competitive market with examples.

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