Art-tile operates in a market where there are a number of competitors and anyone could set up at operation like Art-tile by making the same initial financial commitment as Art. QM is the market demand for tiles and is described by the following demand curve;TilesWorkersAVCATCMCTCRevenue1000108208220009000200019813.67.25000018000300027711.26.4930002700040003479.85.614800036000500041795.62170004500060004868.45.63000005400070005878.384180006300080007078.59.657200072000 P = 40 - .0001QM What is the long run equilibrium price for the type of tiles that Art-tile produces? Why? How many companies will produce this type of tile in long run equilibrium?

Tiles Workers AVC ATC MC TC Revenue 1000 10 8 20 8 22000 9000 2000 19 8 13.6 7.2 50000 18000…

Answered: What is the long run equilibrium price…

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter11: Price-searcher Markets With High Entry Barriers

Section: Chapter Questions

Problem 13CQ

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Art-tile operates in a market where there are a number of competitors and anyone could set up at operation like Art-tile by making the same initial financial commitment as Art. Q_M is the market demand for tiles and is described by the following demand curve;

Tiles	Workers	AVC	ATC	MC	TC	Revenue
1000	10	8	20	8	22000	9000
2000	19	8	13.6	7.2	50000	18000
3000	27	7	11.2	6.4	93000	27000
4000	34	7	9.8	5.6	148000	36000
5000	41	7	9	5.6	217000	45000
6000	48	6	8.4	5.6	300000	54000
7000	58	7	8.3	8	418000	63000
8000	70	7	8.5	9.6	572000	72000

P = 40 - .0001Q_M

What is the long run equilibrium price for the type of tiles that Art-tile produces? Why?

How many companies will produce this type of tile in long run equilibrium?

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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