Because you know that competitive firms earnzero economic profit in the long run, you know the long-run equilibrium price must be $ per pound. From the graph, you can see that this means there will be firms operating in the ruthenium industry in long-run equilibrium. Consider the competitive market for ruthenium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. COSTS (Dollars per pound) 80 72 64 56 48 ATC 40 32 24 16 AVC MC- B 12 16 20 24 28 32 36 QUANTITY (Thousands of pounds) 40 ?
Because you know that competitive firms earnzero economic profit in the long run, you know the long-run equilibrium price must be $ per pound. From the graph, you can see that this means there will be firms operating in the ruthenium industry in long-run equilibrium. Consider the competitive market for ruthenium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. COSTS (Dollars per pound) 80 72 64 56 48 ATC 40 32 24 16 AVC MC- B 12 16 20 24 28 32 36 QUANTITY (Thousands of pounds) 40 ?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter8: Perfect Competition
Section: Chapter Questions
Problem 41P: A computer company produces affordable, easy-to-use home computer systems and has fixed costs of...
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