The industry in long-run competitive equilibrium
Course:- Business Economics
Reference No.:- EM131086057

Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Business Economics

A firm in a purely competitive industry is currently producing 1,000 units per day at a total cost of $450. If the firm produced 800 units per day, its total cost would be $300, and if it produced 500 units per day, its total cost would be $275.

What is the firm’s ATC per unit at each of these three levels of production?

If every firm in this industry has the same cost structure, is the industry in long-run competitive equilibrium?

From what you know about these firms cost structures, what is the highest possible price per unit that could exist as the market price in long-run equilibrium?

If that price ends up being the market price and if the normal rate of profit is 10 percent, then what will each firm’s accounting profit per unit be?

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Business Economics) Materials
This is the market data for Vespa motorbikes in Houston. Demand: P = 400 - 0.50Q Supply: P = 260 + 0.20Q where P = Price and Q = Quantity. Calculate the equilibrium price and
Suppose you deposit $10,000 in a savings account that earns 8% nominal annual rate for 5 years. The interest will be compounded semi-annually. What are the periodic and the ef
Demand and Supply". Use the linear demand and supply curves shown in the figure to answer the following questions: The economic value of the 10,000th unit is $_______, and the
True/False questions: The Durbin-Watson (DW) statistic is used to detect first order-serial correlation. Positive lag 1 residual autocorrelation is associated with DW values g
Consider the following hypothetical supply and demand schedules for milk, with price (P) expressed in ¢/lb and quantities (Q) expressed in billion lbs: Supply: P = 10 + 0.8 Q
What is an efficient outcome? How does the assignment of property rights affect the efficiency of outcomes? "Competitive markets tend toward efficient outcomes." Explain what
Which of the following is FALSE about intraindustry trade? Economies of scale allow firms to enjoy lower average costs. It creates gains from trade. It is due to comparative a
Any increase in the present value of taxes implies a decrease in lifetime wealth and a decrease in the current labor supply, assuming that the substitution effect is stronger