Below, the graph on the left shows the long-run average and marginal cost for a typical firm in a perfectly competitive industry. The graph on the right shows demand and long-run supply for the industry. LMC, LAC 40 LMC 40 35 LAC 30 VIX 25 20 15 35 30 25 20 15 10 5 0 I 100 200 300 400 500 Firm's output O $15; 250 O $15; 400 O $35; 250 9 O $35; 400 10 5 Industry output Long-run equilibrium occurs because of the entry of new firms into the industry or the exit of existing firms from the industry. In the above industry, long-run equilibrium occurs at a price of and output of P 0 S

ENGR.ECONOMIC ANALYSIS
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Question 14
Below, the graph on the left shows the long-run average and marginal cost for a typical firm in a perfectly competitive industry. The graph
on the right shows demand and long-run supply for the industry.
LMC, LAC
Price and cost (dollars)
40
P
LMC
40
35
LAC
30
25
Vix
20
15
10
35
30
25
20
15
10
5
0
$15; 250
$15; 400
$35; 250
Price and cost (dollars)
100 200 300 400 500
Firm's output
Industry output
Long-run equilibrium occurs because of the entry of new firms into the industry or the exit of existing firms from the industry. In the above
industry, long-run equilibrium occurs at a price of
and output of
$35; 400
LO
5
0
S
D
Transcribed Image Text:Question 14 Below, the graph on the left shows the long-run average and marginal cost for a typical firm in a perfectly competitive industry. The graph on the right shows demand and long-run supply for the industry. LMC, LAC Price and cost (dollars) 40 P LMC 40 35 LAC 30 25 Vix 20 15 10 35 30 25 20 15 10 5 0 $15; 250 $15; 400 $35; 250 Price and cost (dollars) 100 200 300 400 500 Firm's output Industry output Long-run equilibrium occurs because of the entry of new firms into the industry or the exit of existing firms from the industry. In the above industry, long-run equilibrium occurs at a price of and output of $35; 400 LO 5 0 S D
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