In Figure 10.4, in the long-run equilibrium: Figure 10.4 There are two graphs horizontally next to each other; the first graph is denoted as Market; on the first graph there are two supply curves S1 and S2 and one demand curve D; supply curve S1 intersects demand curve D at P1=$2, Q1, and supply curve S2 intersects demand curve D at P2=$1.50, Q2; the second graph is denoted as Firm; there are four curves on the second graph; two horizontal demand curves, one of which is D1=P1=AR1=MR1 and the second one is D2=P2=AR2=MR2; D1=P1=AR1=MR1 is above D2=P2=AR2=MR2 at the height of $2=P1 in the first graph and D2=P2=AR2=MR2 is at the height of $1.50=P2 in the first graph; the remaining two curves are MC and AC; at quantity 98 AC, a U-shaped curve, is tangent to D2=P2=AR2=MR2, and at the same quantity 98, MC intersects D2=P2=AR2=MR2; as MC is upward sloping in this range, MC intersects D1=P1=AR1=MR1 at quantity 100 In Figure 10.4, in the long-run equilibrium: firms have a tendency to leave the industry since they are not making any money. firms are charging $1.50, a price that just covers the cost of producing the last unit of output