Tea production takes place in a perfectly competitive industry, ...

[knemetz3]

Tea production takes place in a perfectly competitive industry, and all tea producers have the same cost curves. The market price for an ounce of tea is $3.85 and each firm can maximize profits by producing 270 ounces a day. At 270 ounces a day, the average total cost of producing tea is $3.10 an ounce. Minimum average variable cost is $2.35 an ounce and the minimum average total cost is $2.40 an ounce.
In the short run, the tea producer earns an economic ________ (profit/loss) of ________ which causes firms to ________ (enter/exit) the industry.
What is the price and economic profit in the long run?
◦ profit, $391.50, exit, $2.35, $0
◦ profit, $202.50, enter, $2.40, $0
◦ profit, $202.50, exit, $2.40, $13.50
◦ profit, $391.50, enter, $2.35, $13.50

[senorfranco]

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[knemetz3]

Thanks for the timely response, appreciate it

[mjenn52]

Great answer, keep it coming