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Fixed Cost

Industry Sales

F
S
b
c

n
S/n
AC

750,000
900,000
0.03
5000

750,000
1,600,000
0.03
5000

750,000
2,500,000
0.03
5000

6
150,000
10000

8
200,000
8750

10
250,000
8000

750,000
900
0.0003333
5000

750,000,000
1,600,000
0.03
5000

750,000,000
2,500,000
0.03
5000

AC=P=c + 1/(nb)
Fixed Cost
Industry Sales

F
S
b
c

n
S/n
AC

1.8973665961 0.2529822128 0.316227766


474
6,324,555
7,905,694
1586138.8301 123585.41226 99868.329805

AC=P=c + 1/(nb)

360
18.973665961

640
25.298221281

360000
600

Q = S[1/n b(P P)]

Q is an individual firms sales

S is the total sales of the industry

n is the number of firms in the industry

b is a constant term representing the responsiveness of a firms sales


to its price

P is the price charged by the firm itself

P is the average price charged by its competitors

10

500
375

3750

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