With identical cost structures, the firms, in the long run, will all end up producing where the AC is minimized. So, P=10, plug this into the demand equation to get total Q.
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perfectly competitive industry. Each firm having identical cost structures. long-run average cost is minimized at an output of 20 units. Minimum average cost is $10 per unit. total market demand is Q=1500-50P.
What is the long-run equilibrium price? Total industry output? output of each firm? number of firms? profits of each firm?
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am i doing this correctly? total output = 1000. output of each firm 20. number of firms 50. ?finding equilibrium price and profits from firms?
Yes, you are on the right track. You have the equilibrium price, P=10. At P=10, average revenue must also be 10. Average cost is 10, so profits are zero.
1 answer