Business, 27.10.2021 14:00 brooklyn4932

A firm in a purely competitive industry is currently producing 1,000 units per day at a total cost of $600. If the firm produced 800 units per day, its total cost would be $400, and if it produced 500 units per day, its total cost would be $375.
Instructions: Enter your answers rounded to two decimal places,
a. What is the firm's ATC per unit at these three levels of production?
at 1,000 units, ATC=
at 800 units, ATC=
at 500 units, ATC=
b. if every firm has the same cost structure, is the industry in long-run competitive equilibrium?
c. From what you know about these firms’ cost structures, what is the highest possible price per unit that could exist as the market price in long-run equilibrium?
d. If that price ends up being the market price and if the normal rate of profit is 10%, then what will each firm’s accounting profit per unit be? cents per unit.

Answers: 2

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