Calculate market price for industry in long run equilibrium

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Reference no: EM1369353

A company in a purely competitive industry is currently manufacturing 1200 units per day at a total cost of $600. If the company purchased 1000 units per day, its total cost would be $400, and if it produced 700 units per day, its total cost would be $375. What is the firms ATC per unit at these three levels of production? If every firm in this industry has the same cost structure, is the the industry in long-run competitive equilibrium? From what you know about these firms' cost structures, what is the highest possible price per unit that could exist as the market price in long-run equilibrium? If that price ends up being the market price and if the normal rate of profit is 10%, then how big will each firm's accounting profit per unit be?

Reference no: EM1369353

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