Question
All companies in this market have the same costs and are producing a quantity of 30. What will happen? Amount Total Revenue Explicit Cost Implicit
All companies in this market have the same costs and are producing a quantity of 30. What will happen?
Amount Total Revenue Explicit Cost Implicit Costs
20 100 72 10
30 150 124 12
40 200 186 14
50 250 250 16
60 300 322 18
a)Companies in this market will try to lower implicit costs
b)Existing companies will leave the market
c)New Companies will enter the market
d)Prices will rise
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I would say that quantity of each would increase to 40 so that total revenue = total costs. But that is not an option. Is that why new companies might enter the market?
I read this as each firm produces 30, but this only seems to make sense if the amount is total of all firms. Then, it makes more sense to me that new firms would enter.
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