Question 11B AMSN.com Hollnil Outlo X Chambe\'lain Urne, sity × Week 3: MEL Hon

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Question 11B

AMSN.com Hollnil Outlo X Chambe'lain Urne, sity × Week 3: MEL Hon wurk × @ Do Homework Pamela HdX ( https://www.mathxl.com/Student/PlayerHomework.aspx?homeworkld-45817491 2&questionid;=1&fl; ea search Principles of Economics Pamela Harris | 11/10/17 11:39 AM Homework: Week 3 Homework 35 pts Save Score: 0 of 1 pt 11 of 35 (10 complete) HW Score: 28.57%, 10 of 35 pts Checkpoint 3 Problem 2 Question Help Rose growing is a perfectly competitive industry and all rose growers have the same cost curves. The market price of roses is S5 a bunch and each grower maximizes profit by producing 500 bunches a week. The average total cost of producing roses is $14 a bunch. Minimum average variable cost is $3 a bunch, and the minimum average total cost is $10 a bunch. In the long run, the market price of roses is a b c. $10 OD. $14 OE. $34 In the long run, a rose grower's economic profit is $ Enter your answer in the answer box and then click Check Answer Clear All Check Answer 1:39 PM Type here to search 11/10/2017

Explanation / Answer

Every firm in a perfectly competitive market operates at its minimum of average cost in the long run. This implies that the long run price is always the minimum of average cost and in this case this price is $10. Therefore the correct option is $10.

Moreover there will be zero economic profit in the long run because price is equals to average total cost and hence there is no economic profit to any firm. Thus the answer to the blank is 0.

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