In view of the profits being made, more firms will want to get into Frisbee production. In the long run, these new firms will shift the market supply curve to the right and push the price down to average total cost, thereby eliminating profits. At what equilibrium price are all profits eliminated? How many firms will be producing Frisbees at this price? Chapter 6Q10: (15%)Suppose that the monthly market demand schedule for Frisbees is:Price$4800$31,600$8$7$6$5$2$1QuantityDemanded1001502004003,0007,500Suppose further that the marginal and average costs of Frisbee productionfor every competitive firm areRate of Output | 10Marginal Cost $2.00 $3.0o $4.00 $5.00 $6.00 $7.00Average Cost2030405060$2.00$2.25 $2.75 $3.00 $4.5o $6.00Finally, assume that the equilibrium market price is $5 per Frisbee.(а)(b)(c)(d)How many Frisbees are being sold in equilibrium?How many (identical) firms are initially producing Frisbees?How much profit is the typical firm making?In view of the profits being made, more firms will want to get intoFrisbee production. In the long run, these new firms will shift themarket supply curve to the right and push the price down to averagetotal cost, thereby eliminating profits. At what equilibrium price areall profits eliminated? How many firms will be producing Frisbees atthis price?

Long-run equilibrium is where marginal cost equals average cost equals price. Total number of firms…

In view of the profits being made, more firms will want to get into Frisbee production. In the long run, these new firms will shift the market supply curve to the right and push the price down to average total cost, thereby eliminating profits. At what equilibrium price are all profits eliminated? How many firms will be producing Frisbees at this price?

In view of the profits being made, more firms will want to get into Frisbee production. In the long run, these new firms will shift the market supply curve to the right and push the price down to average total cost, thereby eliminating profits. At what equilibrium price are all profits eliminated? How many firms will be producing Frisbees at this price?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 31P: Return to Figure 9.2. Suppose P0 is 10 and P1 is 11. Suppose a new firm with the same LRAC curve as...

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