Consider the long run in a competitive industry in which all firms have the same marginal...

Consider the long run in a competitive industry in which all firms have the same marginal cost function: ??(?)=2?, where ? stands for the amount of output produced.

Part 1:

Suppose the market price for the good equals $15 per unit. If there are currently 38 firms in the industry, they will supply a total of __________ units of output.

Part 2:

Suppose the price was actually one dollar higher (so $16 instead of $15). The total amount of output produced by the industry would be ___________ units.

Part 3:

Return to the original price ($15), but assume that there are currently 42 firms in the industry. The output produced by the industry would be _________ units.

Part 4:

Suppose the price was actually one dollar higher (so $16 instead of $15), but assume that there are currently 42 firms in the industry. The total amount of output produced by the industry would be __________ units.

Part 5:

Considering the questions in Parts 1 through 4, the more firms there are in the industry, the flatter the industry supply curve would be

True or False?

Expert Solution

Rahul Sunny answered 1 year ago

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