The high price for shiitakes has caused more farms to enter the industry, and you, as...

 

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The high price for shiitakes has caused more farms to enter the industry, and you, as well as some other farmers, have expanded the scale of your production. The price of mushrooms is starting to drop as more farmers enter and more farms expand their scale of production. Hoping to stay ahead of the curve, you try to anticipate what the price will be in the long run. You gather up some cost data from your company and call up a friend of yours who also owns a mushroom farm. You realize that your cost structures are pretty similar, and you use the information to create a long-run marginal cost curve and long-run average cost curve for a "typical" mushroom farm. Price (dollars per pound) $ 28 24 20 16 12 8 4 10 20 30 LMC LAC 40 50 60 70 80 90 Quantity (thousands of pounds per year) Assuming every mushroom farm has these same cost curves, what price do you expect to see prevail in the long run? Type value into the blank space provided below, and click Submit. The high price for shiitakes has caused more farms to enter the industry, and you, as well as some other farmers, have expanded the scale of your production. The price of mushrooms is starting to drop as more farmers enter and more farms expand their scale of production. Hoping to stay ahead of the curve, you try to anticipate what the price will be in the long run. You gather up some cost data from your company and call up a friend of yours who also owns a mushroom farm. You realize that your cost structures are pretty similar, and you use the information to create a long-run marginal cost curve and long-run average cost curve for a "typical" mushroom farm. Price (dollars per pound) $ 28 24 20 16 12 8 4 10 20 30 LMC LAC 40 50 60 70 80 90 Quantity (thousands of pounds per year) Assuming every mushroom farm has these same cost curves, what price do you expect to see prevail in the long run? Type value into the blank space provided below, and click Submit.

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20 per pound In the long run a competitive firm since there is f... View the full answer