Is the industry in long-run equilibrium at this price

Reference no: EM131324788

Why invest capital in purely competitive industries with equilibrium margins that are razor thin and entrants that erode quasi profits? Suppose volume is not exceptionally large, why then?

Assume that a firm in a perfectly competitive industry has the following total cost schedule:

a. Calculate a marginal cost and an average cost schedule for the firm.

b. If the prevailing market price is $17 per unit, how many units will be produced and sold? What are profits per unit? What are total profits?

c. Is the industry in long-run equilibrium at this price?

Reference no: EM131324788

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