(e) Assume that the short-run cost curves are drawn for the long-run efficient plant size and that all firms in the industry are identical. Are any of the market prices from part (d) a long-run equilibrium price? Explain. [5]

Context -

This is the question and the answer for (d) that question (e) is referring to

(d) Suppose this firm operates in a perfectly competitive market where the market price is $4.00 per unit of output. How many units will the firm produce? What if the market price is $12.00? What if the market price is 36.00? [5]

If the firm was operating in a perfect competitive market then the equation would be

P = MC

When price is $4

By using the table in part C

MC = 4 at the 3 units of labor, therefore the firm will produce 18 units of output

When price is $12

The firm will produce Q = 3 and Q = 27. If the firm can produce 27 units of output at $12 if they don't stop producing at 3 units of output.

When price is $36

The firm will produce 28 units of output.