Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer these questions Question 3: Before Leia's firm from Question 2 opened, there were 3 firms producing rubber bands. Assume each firm was a

Please answer these questions

image text in transcribed
Question 3: Before Leia's firm from Question 2 opened, there were 3 firms producing rubber bands. Assume each firm was a price-taker. Information for each firm is recorded in Table 3. a) Using on the information in Table 3, plot the market level long-run supply curve for the rubber band market before Leia's firm entered the market for prices between $0 and $4. Hint: it may help to first plot the ATC curves. b) Before Leia's firm entered, the market price for rubber bands was $2.5. After Leia's firm entered the market, the price fell to $0.75. What is long-run market quantity supplied (at p=$0.75) after Leia's firm entered? c) Which firm in Table 3 lost the most profit from Leia's firm entering the market? How much profit did they lose? Table 3: Rubber Band Firms Firm A Firm B Firm C ATC 29 - 3+ QIN 4 12 q- 3.5 + 39 - 10 + MC 49 - 3 29 - 3.5 69 - 10

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Macroeconomics

Authors: N Gregory Mankiw

8th Edition

1305971507, 9781305971509

More Books

Students also viewed these Economics questions

Question

1. Information that is currently accessible (recognition).

Answered: 1 week ago