At a market price of $12 a toy, how many toys does the firm produce and what is its economic profit in the short run? How will the number of firms in the market change in the long run?

Figure 15.5 shows the short-run cost curves of a toy producer. The market has 1,000 identical producers and the table shows the market demand schedule for toys.

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FIGURE 15.5 Chapter Checkpoint Assignable Problems 5 to 7 Price and cost (dollars per toy) 24 21 18 15 12 0 500 MC ATC AVC 1,000 1,500 2,000 2,500 BILDE Output (toys per week)