Econ/algebra help?
I cannot figure out how to solve this problem, as each equation has 2 variables, yet I am only given one piece of information
Consider a monopolistically competitive market with N firms. Each firm’s business opportunities are described by the following equations:
Demand:Q=100N-P
Marginal revenue:MR=100N-2Q
Total Cost:TC=50+Q^2
Marginal Cost:MC=2Q
If there are 5 firms in this market, how many does each produce? (Answer is a whole number.)
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Answers & Comments
A monopolistically competitive firm will produce until MR = MC
Set those two equations equal to each other, and plug in 5 for N. Solve for Q
2Q=100N-2Q
4Q = 500
Q = 125
You can't have 5 firms in a monopolistically competitive market. That is an oligopoly.