Class exercise for chapter 11 (1)

Class exercise for chapter 11 (1) - d In long-run...

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Class exercise for chapter 11: Price taking firms The following graph shows a perfectly competitive firm's long-run cost curves. a. If price is $70, the firm will produce 5500 units of output. b. If price is $70, total revenue will be 385,000 and total cost will be 275,000. c. If price is $70, the firm makes 110, 000 economic profit.
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Unformatted text preview: d. In long-run competitive equilibrium, the firm will produce 4000 units of output and sell them at a price of $40 if this is a constant cost industry. e. In long-run equilibrium, the firm's economic profit is $ 0....
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