Question
*** Note: Please help me explain thoroughly step by step. Thank you so much. The coffee market in New York is a competitive market, and
*** Note: Please help me explain thoroughly step by step. Thank you so much.
The coffee market in New York is a competitive market, and demand for coffee is as follows. Q=-100*(P-13) The fixed cost of a coffee producer is $9 and the marginal cost is as follows. MC=2*Q (a) The current price of coffee is $11 per coffee. How many coffees will be sold? How many coffees does each producer produce? How many producers currently exist in the market? What is the profit for each producer? (b) Is the situation in (a) be sustainable in long-term? If so, explain why. If not, calculate the price at long-term equilibrium (assuming producers can easily entry and exit into this market in the long term).
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