17. In 2011, the box industry was perfectly competitive. The lowest point on the

Question

17. In 2011, the box industry was perfectly competitive. The lowest point on the long-run average cost curve of each of the identical box producers is $4, and this minimum point occurs at an output of 1,000 boxes per month. The market demand curve for boxes is

            QD = 140,000 – 10,000 P,

where P is the price of a box (in dollars per box), and QD is the quantity of boxes demanded per month. The market supply curve for boxes is

            QS = 80,000 + 5,000 P,

where QS is the quantity of boxes supplied per month. The equilibrium quantity of boxes in the market is …and the number of firms in this industry when it is in long-run equilibrium is …..

A. 100,000 units and 1,000 firms.

B. 200,000 units and 200 firms.

C. 100,000 units and 100 firms.

D. 200,000 units and 100 firms.

E. none of the above.

Explanation / Answer

C. 100,000 units and 100 firms.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.