Consumers in Carlandia are willing to purchase up to 100,000 cars each year. Suppose the long-run average cost curve for auto producers in Carlandia looks like that shown in the figure on the right.
a. If the supply side of Carlandia's auto market has 10 identical firms operating, what is the lowest potential price that consumers might be able to purchase a car for?
b. If the supply side of Carlandia's auto market is served by a monopolist, what is the lowest potential price that consumers might be able to purchase a car for?
c. Conventional wisdom suggests that competition is preferred to monopoly. Do your answers to (a) and (b) support this widely held view?
d. Suppose the car market in Carlandia is served by a monopolist. One day, fed up with the mediocre quality of the existing supplier's offerings, a resident decides to open a competing car company. What are the new company's chances of lasting in this industry? Explain your reasoning.

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Costs (S/unit) $40,000 30,000- 20,000- 10,000 LAC CD 10 20 30 40 50 60 70 80 90 100o. , Quantity (thousands)