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 QD= 140000 - 10000P where P was the price of a box (in dollars per box) and QD was the quantity of boxes demanded per month. The market supply curve for boxes was Qs= 80000 + 5000P Where QS was the quantity of boxes supplied per month. (a) What was the equilibrium price of a box? Is this the long-run equilibrium price? (b) How many firms are in this industry when it is in long-run equilibrium?
In 2012, the box industry was
QD= 140000 - 10000P
where P was the price of a box (in dollars per box) and QD was the quantity of boxes demanded per month. The market supply curve for boxes was
Qs= 80000 + 5000P
Where QS was the quantity of boxes supplied per month.
(a) What was the
(b) How many firms are in this industry when it is in long-run equilibrium?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
