Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please add a graph too In 2004, the country of Lesotho in southern Africa made most of its export earnings, 90% in 2004, from garment
Please add a graph too
In 2004, the country of Lesotho in southern Africa made most of its export earnings, 90% in 2004, from garment and textile factories. Many of these clothing items, particularly t-shirts, were sold in the U.S. Assume that the market for cotton textiles is perfectly competitive. Assume, also, that the market price for a t-shirt is $3 and the marginal cost function for a typical Lesotho textile factory is MC = .5+.1Q (Q is in 1000's of t-shirts). Solve for Q, the output of a typical Lesotho factory. Using a graph, illustrate the long run equilibrium for this Lesotho garment factory in 2004 (hint: you will need to graph the above two functions plus a hypothetical (but plausible) ATC function).
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To solve for the output Q of a typical Lesotho textile factory and illustrate the longrun equilibriu...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started