What was the equilibrium rice of a box

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Reference no: EM13186738

In 2012, the box industry was perfectly competitive. The lowest point on the long-run average cost curve of each of the identical box producers was $4, and this minimum point occurred at an output of 1,000 boxes per month. The market demand curve for boxes was

Qp = 140,000 - 10,000P

Where P was the price of a box (in dollars per box) and Qp was the quantity of boxes demanded per month. The market supply curve for boxes was

Qs = 80,000 + 5,000P

Where Qs was the quantity of boxes supplied per month.

a. What was the equilibrium rice of a box? Is this the long-run equilibrium price?

b. How many firms are in the industry when it is in long-run equilibrium?

Reference no: EM13186738

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