In the gadget industry, each firm must have one gadget press, regardless of how many gadgets it produces. The cost of a gadget press is the only fixed cost that firms face in this industry. Entry by gadget firms can bid up the cost of gadget presses. The following charts show
(1) The demand for gadgets;
(2) The marginal cost of producing gadgets at each individual firm;
(3) The cost of a gadget press as a function of the number of firms in the industry:
Price Quantity Demanded
1 ......... 800
2 ......... 700
3 ......... 600
4 ......... 500
5 ......... 400
6 ......... 300
Quantity Marginal Cost
1 ......... $1
2 ......... 2
3 ......... 3
4 ......... 4
5 ......... 5
6 ......... 6
Number of Firms Cost of Gadget Press
0–75 ......... $6
76–150 ........ 10
151–225 ......... 15
226–300 ......... 18
>300 ............ 21
What is the long-run equilibrium price of gadgets?