Questions tagged [equilibrium-price]

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2 votes
3 answers

How can an individual firm sell ANY quantity for the market price under perfect competition?

I keep hearing that under perfect competition, an individual firm can sell ANY quantity as long as they sell at the equilibrium price. But this doesn’t make sense to me. For the market supply and ...
0 votes
1 answer

Calculating profit from price and cost

For a given item, if we know that the equilibrium price is 400 and the cost of manufacturing quantity $x$ of the item is $2x^3+900$, then how can I find the profit? My initial thoughts are that this ...
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1 vote
1 answer

Why is this equilibrium price unique? (Varian exercise)

My questions refer to the first exercise in chapter one of Varian - Intermediate Microeconomics (9th edition). The exercise deals with an apartment rental market, an example explored in the first ...
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2 votes
3 answers

What does it mean when an economist talks about "equilibrium"

In economics, there are many equilibrium concepts, like equilibrium under perfect competition, Monopolist equilibrium, competitive equilibrium, general equilibrium, nash equilibrium, equilibrium price,...
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0 votes
1 answer

Price competition; finding the equilibrium expression for price and profit

This question deals regarding the price competition between two firms developing products that directly compete on the market. Fundamentally basing on the game theory and the Nash equilibrium, the aim ...
5 votes
1 answer

Derivation of Surplus in Paul Romer's paper on "mathiness"

In this paper by P. Romer I'm wondering the Surplus $S$ was derived. By using the given condition I found that $$q_0=m^{-\tfrac{1}{a+b}}N^{-\...
2 votes
2 answers

What is the equilibrium price in this case?

From the Review Questions to Chapter 1: The Market in Hal Varian's Intermediate Microeconomics with Calculus, 9th ed.: Suppose that there are 25 people who had a reservation price of $\\\$500$, and ...
1 vote
0 answers

Analytical approach to estimate equilibrium price for Real Estate Property

I am looking to calculate the equilibrium price, i.e an optimal price that I can set without affecting demand and maximize revenue. I've gathered historical data: occupancy rates, asking rents for ...
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0 votes
1 answer

Profit maximization, when $MC = P$, in a simple supply table and curve

Our economics school book states that the profits of a company are maximized when MC = P. However, I am having some trouble wrapping my head around that. For example, I have the following exercise: ...
1 vote
0 answers

Time-dependent market-clearing equilibrium price

I'm working my way through Chiang and Wainwright's Fundamental Methods of Mathematical Economics (4th ed) while holed up at home. On p. 532, in exercise 16.4 2. (b), the authors ask you to find the ...
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