Microeconomics

3. An industry currently has 100 firms, all of which have fixed costs of $16 and average variable cost as follows:
Quantity Average Variable Cost
1 $1
2 2
3 3
4 4
5 5
6 6

1) The price is currently $10. What is the total quantity supplied in this market? 10
2) As this market makes the transition to its long-run equilibrium, will the price rise or fall? Price will fall. Will the quantity supplied by each firm rise or fall? Rise.
3) Graph the long-run supply curve for this market.

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