# Suppose there is free entry in the market for microphones. the demand for microphones is given by: qd=

###### Question:

calculate the long run number of firms in this market.

## Answers

The number of firms in the long run is 9.

Explanation:

Demand function: QD = 176 - 7P

Average total cost functions: ATC = 32/q + 4 + 2q

The long-run price of a perfectly competitive market is equal to the minimum average total cost.

The output at minimum average total cost is found by differentiating ATC and equating to zero.

[tex]\frac{dATC}{dq}=\frac{-32}{q^{2} }+2=0[/tex]

[tex]q^{2}=\frac{32}{2}[/tex]

[tex]q^{2}=16[/tex]

[tex]q=\sqrt{16}[/tex]

q = 4

Price = ATC = (32/4) + 4 + (2 × 4)

= 8 + 4 + 8

= 20

The market quantity is

QD = 176 - 7P

Q = 176 - (7 × 20)

Q = 176 - 140

Q = 36

Number of firms = Q ÷ q

= 36 ÷ 4

= 9

Therefore, the number of firms in the long run is 9.

they can see what that city is producing and to also see if they can some how get that product. like gold in africa.

the answer is d

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