Widgets are produced by a constant-cost industry. The following chart shows the industry-wide demand curve and the marginal cost curve of each firm.

There are currently 600 firms in the industry. Each firm has fixed costs of $30.
a. What is the price of widget today?
b. What is the profit of a widget firm today?
c. In the long run, what is the price of a widget?
d. In the long run, how many firms exit theindustry?

Transcribed Image Text:

Demand Firm's Marginal Cost Curve Quantity Marginal Cost 9 Price $5 10 15 20 25 Quantity 1500 1200 900 10 300