economics

posted by .

A perfectly competitive painted necktie industry has a large number of potential entrants. Each firm has an identical cost structure such that long-run average cost is minimized at an output of 20 units. The minimum average cost is $10 per unit. Total market demand is given by Q=1500-50P.

a. What is the industry's long-run supply schedule?

  • economics -

    From the information, you have given, Price will be $10. If demand increase an prices rises above $10 in the short run, more firms will enter and drive the price back down to $10. If demand falls and and price falls below $10, all firms will begin to lose money in the short run, some firms will drop out lowering Q and therefore raising the price back up to $10.

    Long-run supply is therefore perfectly elastic at $10.

  • economics -

    $10

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Economics

    Yeah, so I'm in urgent need of help with this homework. 1. Assume that in a perfectly competitive market, a firm's costs and revenue are: Marginal cost = average variable cost at $20 Marginal cost = average total cost at $30 Marginal …
  2. economics

    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 …
  3. economics

    This is going to be really long, but I want to see if my answers are correct. This is problem number 10.10 in my Intermediate Microeconomics book. A perfectly competitive painted necktie industry has a large number of potential entrants. …
  4. Micreoeconomics

    1. Assume a perfectly competitive constant cost industry, currently in long-run equilibrium. Market demand in the industry is given by Q = 1500 - 25P. The short-run market supply curve is given by: Q = 15P - 100 for P B 10 = 0 for …
  5. Economics/Math

    In a perfectly competitive industry, the market price is $25. A firm is currently producing 10,000 units of output, its average total cost is $28, its marginal cost is $20, and its average variable cost is $20. Given these facts, explain …
  6. To: Economyst

    Hi there. You helped me with a couple of questions regarding Econ. I appreciate the help but my issue is I don't understand how you calculate the minimum average variable cost or the output that maximizes profit. I do understand that …
  7. microeconomics

    The short-run cost curve for each firm's long run equilibrium output is C=y^2-20y+400. Calculate the short-run average and marginal cost curves. At what output level does short-run average cost reach a minimum?
  8. economics

    A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue so $10, average total cost of $8 and fixed cost of $200. a. what is the profit?
  9. Economics

    a firm in a purely competitive industry is currently producing a 1000 unir per day at a total cost of $450. if the firm produced 800 units per day, it total cost will be $300, and it it produced 500 units per day, it total cost will …
  10. Microeconomics

    A perfectly competitive industry has a large number of potential entrants. Each firm has an identical cost structure such that long run average cost is minimized at an output of 10 units (qi=10 ). The minimum average cost is R5 per …

More Similar Questions