Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help answer the question. Q1/ The market for apijle pies in this city is perfectly competitive and has the following market demand schedule.

image text in transcribed

Please help answer the question.

image text in transcribed
\\ Q1/ The market for apijle pies in this city is perfectly competitive and has the following market demand schedule. Each producer in the market has fixed costs of $9 and the following marginal cost schedule: Market Demand schedule Marginal cost schedule of each producer Price Quantity Quantity Marginal Cost | Demanded(pies (pie) a. Compute each producer's total cost and average total cost for 1 to 6 pies in a table. b. The market price of a pie is now $11. How many pies are sold in the market? How many pies does each producer make? How many producers are there? How much profit does each producer earn? Depict all answers in two relevant diagrams. c. Is the situation described in part (b) a long-run equilibrium? Why or why not? d. Suppose that in the long run there is free entry and exit. How much profit does each producer earn in the long-run equilibrium? What is the market price and number of pies each producer makes? How many pies are sold in the market? How many pie producers are operating in the market? Depict all answers in the above relevant (part b) diagrams

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

Step: 3

blur-text-image

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

Leading and Collaborating in the Competitive World

Authors: Thomas S Bateman, Scott A Snell, Robert Konopaske

13th edition

1259927644, 1259927645, 978-1260194241

More Books

Students also viewed these Economics questions

Question

3 . 1 4 LAB - Select lesson schedule with multiple joins

Answered: 1 week ago

Question

13. Give four examples of psychological Maginot lines.

Answered: 1 week ago