The minimum feasible long run average cost for firms in a perfectly competitive industry is $40 per unit. If every firm in the industry is currently producing an output consistent with a long-run equilibrium, what is the marginal cost incurred by each firm? What is the market price? Concept Introduction: Perfect competition: The perfect competition is a purely competitive market selling homogenous products. The characteristics of perfect competition are, there are many buyers and sellers, firms get freedom of entry and exit which means at any time, a new firm can enter into the market or an existing firm can leave the market. All products produced in the market are homogenous and identical. The firm is a price taker. Market price is determined by demand and supply forces. The consumers have full knowledge about the market situations and no single firm can alter the market price by changing their product’s price. During the long run, firms make normal profits and during the short run, firms make only super normal profits. Marginal Cost: Marginal cost is the additional cost incurred by firms when producing one more unit of the commodity.

Question

Want to see the full answer?

Answer 1

Question

Chapter 23, Problem 10P

To determine

The minimum feasible long run average cost for firms in a perfectly competitive industry is $40 per unit. If every firm in the industry is currently producing an output consistent with a long-run equilibrium, what is the marginal cost incurred by each firm?

What is the market price?

Concept Introduction:

Perfect competition: The perfect competition is a purely competitive market selling homogenous products. The characteristics of perfect competition are, there are many buyers and sellers, firms get freedom of entry and exit which means at any time, a new firm can enter into the market or an existing firm can leave the market. All products produced in the market are homogenous and identical. The firm is a price taker. Market price is determined by demand and supply forces. The consumers have full knowledge about the market situations and no single firm can alter the market price by changing their product’s price. During the long run, firms make normal profits and during the short run, firms make only super normal profits.

Marginal Cost: Marginal cost is the additional cost incurred by firms when producing one more unit of the commodity.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 2

Question

Chapter 23, Problem 10P

To determine

The minimum feasible long run average cost for firms in a perfectly competitive industry is $40 per unit. If every firm in the industry is currently producing an output consistent with a long-run equilibrium, what is the marginal cost incurred by each firm?

What is the market price?

Concept Introduction:

Perfect competition: The perfect competition is a purely competitive market selling homogenous products. The characteristics of perfect competition are, there are many buyers and sellers, firms get freedom of entry and exit which means at any time, a new firm can enter into the market or an existing firm can leave the market. All products produced in the market are homogenous and identical. The firm is a price taker. Market price is determined by demand and supply forces. The consumers have full knowledge about the market situations and no single firm can alter the market price by changing their product’s price. During the long run, firms make normal profits and during the short run, firms make only super normal profits.

Marginal Cost: Marginal cost is the additional cost incurred by firms when producing one more unit of the commodity.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 23, Problem 10P

To determine

The minimum feasible long run average cost for firms in a perfectly competitive industry is $40 per unit. If every firm in the industry is currently producing an output consistent with a long-run equilibrium, what is the marginal cost incurred by each firm?

What is the market price?

Concept Introduction:

Perfect competition: The perfect competition is a purely competitive market selling homogenous products. The characteristics of perfect competition are, there are many buyers and sellers, firms get freedom of entry and exit which means at any time, a new firm can enter into the market or an existing firm can leave the market. All products produced in the market are homogenous and identical. The firm is a price taker. Market price is determined by demand and supply forces. The consumers have full knowledge about the market situations and no single firm can alter the market price by changing their product’s price. During the long run, firms make normal profits and during the short run, firms make only super normal profits.

Marginal Cost: Marginal cost is the additional cost incurred by firms when producing one more unit of the commodity.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 23, Problem 10P

To determine

The minimum feasible long run average cost for firms in a perfectly competitive industry is $40 per unit. If every firm in the industry is currently producing an output consistent with a long-run equilibrium, what is the marginal cost incurred by each firm?

What is the market price?

Concept Introduction:

Perfect competition: The perfect competition is a purely competitive market selling homogenous products. The characteristics of perfect competition are, there are many buyers and sellers, firms get freedom of entry and exit which means at any time, a new firm can enter into the market or an existing firm can leave the market. All products produced in the market are homogenous and identical. The firm is a price taker. Market price is determined by demand and supply forces. The consumers have full knowledge about the market situations and no single firm can alter the market price by changing their product’s price. During the long run, firms make normal profits and during the short run, firms make only super normal profits.

Marginal Cost: Marginal cost is the additional cost incurred by firms when producing one more unit of the commodity.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 23, Problem 10P

To determine

The minimum feasible long run average cost for firms in a perfectly competitive industry is $40 per unit. If every firm in the industry is currently producing an output consistent with a long-run equilibrium, what is the marginal cost incurred by each firm?

What is the market price?

Concept Introduction:

Perfect competition: The perfect competition is a purely competitive market selling homogenous products. The characteristics of perfect competition are, there are many buyers and sellers, firms get freedom of entry and exit which means at any time, a new firm can enter into the market or an existing firm can leave the market. All products produced in the market are homogenous and identical. The firm is a price taker. Market price is determined by demand and supply forces. The consumers have full knowledge about the market situations and no single firm can alter the market price by changing their product’s price. During the long run, firms make normal profits and during the short run, firms make only super normal profits.

Marginal Cost: Marginal cost is the additional cost incurred by firms when producing one more unit of the commodity.

Answer 6

Chapter 23, Problem 10P

To determine

The minimum feasible long run average cost for firms in a perfectly competitive industry is $40 per unit. If every firm in the industry is currently producing an output consistent with a long-run equilibrium, what is the marginal cost incurred by each firm?

What is the market price?

Concept Introduction:

Perfect competition: The perfect competition is a purely competitive market selling homogenous products. The characteristics of perfect competition are, there are many buyers and sellers, firms get freedom of entry and exit which means at any time, a new firm can enter into the market or an existing firm can leave the market. All products produced in the market are homogenous and identical. The firm is a price taker. Market price is determined by demand and supply forces. The consumers have full knowledge about the market situations and no single firm can alter the market price by changing their product’s price. During the long run, firms make normal profits and during the short run, firms make only super normal profits.

Marginal Cost: Marginal cost is the additional cost incurred by firms when producing one more unit of the commodity.

Answer 7

Chapter 23, Problem 10P

To determine

The minimum feasible long run average cost for firms in a perfectly competitive industry is $40 per unit. If every firm in the industry is currently producing an output consistent with a long-run equilibrium, what is the marginal cost incurred by each firm?

What is the market price?

Concept Introduction:

Perfect competition: The perfect competition is a purely competitive market selling homogenous products. The characteristics of perfect competition are, there are many buyers and sellers, firms get freedom of entry and exit which means at any time, a new firm can enter into the market or an existing firm can leave the market. All products produced in the market are homogenous and identical. The firm is a price taker. Market price is determined by demand and supply forces. The consumers have full knowledge about the market situations and no single firm can alter the market price by changing their product’s price. During the long run, firms make normal profits and during the short run, firms make only super normal profits.

Marginal Cost: Marginal cost is the additional cost incurred by firms when producing one more unit of the commodity.

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. 23 - Prob. 23.1LO Ch. 23 - Prob. 23.2LO Ch. 23 - Prob. 23.3LO Ch. 23 - Prob. 23.4LO Ch. 23 - Prob. 23.5LO Ch. 23 - Prob. AFCT Ch. 23 - Prob. BFCT Ch. 23 - Prob. CFCT Ch. 23 - Prob. 1CTQ Ch. 23 - Prob. 2CTQ

Want to see the full answer?

Chapter 23 Solutions