Answer to Question #37164 in Microeconomics for kenny
In a perfectly (or purely) competitive industry, all firms have the same costs. All firms have a minimum average total cost of $100 at a quantity of 200 and a minimum average variable cost of $46 at a quantity of 100. Initially, the industry is in long run equilibrium. At the long run equilibrium, the price is:
At the long run equilibrium the firms produce the level of output, where price equals minimum average total cost (P = minATC). So, at the long run equilibrium the price is $100 per unit.
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