Superb Professors

In the city of Crullaire, the demand curve for doughnuts is given by the equation P=39-Q/20, where Q is the number of doughnuts per day and P is the price of a doughnut. Each doughnut shop that is open has a fixed cost of $200 per day which must be paid so long as the shop is in business and regardless of the number of doughnuts it sells. There is also a variable cost of $4 for each doughnut sold. Each doughnut shop has a capacity of 40 doughnuts per day.
In the long run, the doughnut market in Crullaire is characterized by free entry and exit of doughnut shops. In long-run competitive equilibrium, how many active doughnut firms are there in Crullaire?
 
Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code “Newclient”

The post In the city of Crullaire, the demand curve for doughnuts is given by the equation P=39-Q/20, where Q is the number of doughnuts per day and P is the price of a doughnut. appeared first on Superb Professors.

"Order a Custom Paper on Similar Assignment! No Plagiarism! Enjoy 20% Discount"