12. An industry currently has 100 firms, all of which have fixed costs of $16 and average variable cost as follows: Quantity Average Variable Cost 1 $1 2 2 3 3 4 4 5 6 6. a. Compute marginal cost and average total cost. b. The price is currently $10. What is the total quantity supplied in the market? c. As this market makes the transition to its long-run equilibrium, will the price rise or fall? Will the quantity demanded rise or fall? Will the quantity supplied by each firm rise or fall?

12. An industry currently has 100 firms, all of which have fixed costs of $16 and average variable cost as follows: Quantity Average Variable Cost 1 $1 2 2 3 3 4 4 5 6 6. a. Compute marginal cost and average total cost. b. The price is currently $10. What is the total quantity supplied in the market? c. As this market makes the transition to its long-run equilibrium, will the price rise or fall? Will the quantity demanded rise or fall? Will the quantity supplied by each firm rise or fall?

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Firms In Competitive Markets

Section: Chapter Questions

Problem 9PA

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