3. Apples are produced in a perfectly competitive industry. Assume that there are 100 identical firms in this industry. Below are graphs for the market supply and demand as well as the cost curves of these firms. 6. 6. MC ATC AVC 1 100 200 300 400 500 600 3 Q(kg) q(kg) (a) Draw the market supply curve for apples. (b) What are the market price and quantity for apples? How much does each firm produce? (c) Caleulate the amount of profit or loss for a firm. (d) Do you expect there to be entry of new firms into this industry, the exit of firm from this industry or neither of the above? Briefly explain. (e) What is the long run equilibrium price of apples and exactly how many (identical) firms will be producing the good? P(TL/unit) P(TL/unit) 2.

3. Apples are produced in a perfectly competitive industry. Assume that there are 100 identical firms in this industry. Below are graphs for the market supply and demand as well as the cost curves of these firms. 6. 6. MC ATC AVC 1 100 200 300 400 500 600 3 Q(kg) q(kg) (a) Draw the market supply curve for apples. (b) What are the market price and quantity for apples? How much does each firm produce? (c) Caleulate the amount of profit or loss for a firm. (d) Do you expect there to be entry of new firms into this industry, the exit of firm from this industry or neither of the above? Briefly explain. (e) What is the long run equilibrium price of apples and exactly how many (identical) firms will be producing the good? P(TL/unit) P(TL/unit) 2.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 9PA

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