What are firms atc per unit at these three levels of product

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Reference no: EM13188055

A firm in a purely competitive industry is currently producing 1000 units per day at a total cost of $450. If the firm produced 800 units per day at a total cost would be $300 and if it produced 500 units per day, its total cost would be $275.

What are the firms ATC per unit at these three levels of production? ATC is average total cost the way to find this is to divide the total cost per unit by the quantity. So with that line of thinking the ATC for 1000 units would be .45. The ATC for 800 units would be .37. The ATC for 500 units would be .55.

If every firm in this industry has the same cost structure, is the industry in long run competitive equilibrium?

From what you know about these firms cost structure, 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 percent, then how big will each firms accounting profit per unit be?

Reference no: EM13188055

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