posted by timmy on .
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?
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.
Take it from here
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.