The market for apple pies in the city of Ectenia is competitiveand has the following demand schedule:
Demand Schedule
Price | Quantity Demanded |
|---|
(Dollars) | (Pies) |
|---|
| 1 | 1,200 |
| 2 | 1,100 |
| 3 | 1,000 |
| 4 | 900 |
| 5 | 800 |
| 6 | 700 |
| 7 | 600 |
| 8 | 500 |
| 9 | 400 |
| 10 | 300 |
| 11 | 200 |
| 12 | 100 |
| 13 | 0 |
Each producer in the market has a fixed cost of $6 and thefollowing marginal cost:
Quantity | Marginal Cost |
|---|
(Pies) | (Dollars) |
|---|
| 1 | 1 |
| 2 | 3 |
| 3 | 8 |
| 4 | 10 |
| 5 | 12 |
| 6 | 14 |
Complete the following table by computing the total cost andaverage total cost for each quantity produced.
Quantity | Total Cost | Average Total Cost |
|---|
(Pies) | (Dollars) | (Dollars) |
|---|
| 1 | | |
| 2 | | |
| 3 | | |
| 4 | | |
| 5 | | |
| 6 | | The price of a pie is now $11. At a price of $11, pies are sold in the market. Each producermakespies, so there areproducers in this market, each making aprofit of. True or False: The market is in long-run equilibrium. True False Suppose that in the long run there is free entry and exit. In the long run, each producer earns a profit of. The market priceis. At this price, pies are sold in this market, and each producermakespies, so there areproducers operating. |
