An industry currently has 100 firms, all of which have fixed costs of $16 and average variable cost as follows:

Quantity Average Variable Cost

1............ $1

2.............2

3.............3

4.............4

5.............5

6.............6

a. Compute marginal cost and average total cost.

b. The price is currently $10. What is the total quantity supplied in the market?

c. As this market makes the transition to its long-run equilibrium, will the price rise or fall? Will the quantity demanded rise or fall? Will the quantity supplied by each firm rise or fall?

d. Graph the long-run supply curve for this market.