10. A perfectly competitive industry consists of many identical firms, each with a long-run average total...

10. A perfectly competitive industry consists of many identical firms, each with a long-run average total cost of LATC = 800 – 10Q + 0.1Q2 and long-run marginal cost of LMC = 800 – 20Q + 0.3Q2.
a. In long-run equilibrium, how much will each firm produce?
b. What is the long-run equilibrium price?
c. The industry's demand curve is QD = 40,000 – 70P. How many units do consumers buy in long-run equilibrium? How many firms are in the industry?
d. Suppose the industry's demand curve rises to QD = 40,600 – 70P. How many new firms will enter this constant-cost industry in the long run?

Expert Solution

Rahul Sunny answered 8 months ago

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