Answer the following questions: 1. Draw graphs showing a perfect...

  1. Home
  2. Homework Library
  3. Business
  4. Economics
  5. Answer the following questions: 1. Draw graphs showing a perfect...

QuestionQuestion

Answer the following questions:

1. Draw graphs showing a perfectly competitive firm and industry in long-run equilibrium.
a. How do you know that the industry is in long-run equilibrium?
b. Suppose that there is an increase in demand for this product. Show and explain the short-run adjustment process for both the firm and the industry.
c. Show and explain the long-run adjustment process for both the firm and the industry. What will happen to the number of firms in the new long-run equilibrium?

Solution PreviewSolution Preview

These solutions may offer step-by-step problem-solving explanations or good writing examples that include modern styles of formatting and construction of bibliographies out of text citations and references. Students may use these solutions for personal skill-building and practice. Unethical use is strictly forbidden.

a) A single firm will produce at a quantity q where price = marginal cost. We assume the industry is made up of 1,000 identical firms so that q = 100,000 where supply equals demand. The industry is in long-run equilibrium because price is equal to minimum average total cost ($50) and the economic profits are zero....

    By purchasing this solution you'll be able to access the following files:
    Solution.docx.

    $14.40
    for this solution

    or FREE if you
    register a new account!

    PayPal, G Pay, ApplePay, Amazon Pay, and all major credit cards accepted.

    Find A Tutor

    View available Economics Tutors

    Get College Homework Help.

    Are you sure you don't want to upload any files?

    Fast tutor response requires as much info as possible.

    Decision:
    Upload a file
    Continue without uploading

    SUBMIT YOUR HOMEWORK
    We couldn't find that subject.
    Please select the best match from the list below.

    We'll send you an email right away. If it's not in your inbox, check your spam folder.

    • 1
    • 2
    • 3
    Live Chats