Author Question: Market Exit and EntryThe table shows a typical firm's output and ... (Read 38 times)

lol1012 · **on:** Nov 23, 2022

Question 1

The Long Run Industry Supply Curve

The table shows output per day and total costs for a single firm in a perfectly competitive industry.

Output per day	Total Cost
0	$51
1	$90
2	$115
3	$151
4	$205
5	$277

What is the long-run price for this industry?
Please round your final answer to two decimal places.
◦ $39.00
◦ $25.00
◦ $32.00
◦ $50.33

Question 2

Market Exit and Entry

The table shows a typical firm's output and costs.

Output	MC	ATC	AVC
1	35.53	38.71	37.33
2	36.35	38.13	36.35
3	37.87	37.87	37.33
4	38.72	38.15	37.78
5	39.26	38.82	312.88

If the firm operates in a perfectly competitive market and there are 500 identical firms in the market, what is the long-run equilibrium price? How many units will each firm produce?
At the long-run price, the market demands 570 units. How many firms will exist in the market in the long run?
◦ $37.87, 3, 190
◦ $37.87, 3, 500
◦ $36.35, 2, 500
◦ $36.35, 2, 190

kuttz · **Reply #1 on:** Nov 23, 2022

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