Question 24 The marked demand schedule for noodles is as follows: Price ($ per c

Question

Question 24 The marked demand schedule for noodles is as follows: Price ($ per case) Q Demanded (case per week) 5.40 50,200 6.40 45,200 7.40 40,000 8.40 35,000 9.40 30,000 10.40 24,800 11.40 19,800 12.40 14,800 The market is perfectly competitive with constant input prices, and each firm has the same cost structure, described by the following table: Output (cases per week) Marginal Cost ($ per case) AVC ($ per case) ATC ($ per case) 150 6.00 8.80 16.50 200 6.40 7.80 13.60 250 7.00 7.00 11.64 300 7.65 7.10 10.97 350 8.40 7.20 10.52 400 10.40 7.50 10.40 450 12.40 8.00 10.58 500 12.70 9.00 11.32 What is the long-run equilibrium price in this industry? a. P = $8.40 b. P = $9.40 c. P = $10.40 d. P = $11.40

Explanation / Answer

1

b.P = $9.40

2

a. 62

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