In Problem 15, do firms enter or exit the market for smoothies in the long run? What is the market price and the equilibrium quantity in the long run?

Problem 15

The market for smoothies is perfectly competitive.
This table sets out the market demand schedule.

Each of the 100 smoothie producers has the following costs when it uses its least-cost plant.

a. What is the market price of a smoothie?

b. What is the market quantity of smoothies?

c. How many smoothies does each firm sell?

d. What is each firm’s economic profit or loss?

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Price (dollars per smoothie) 1.90 2.00 2.20 2.91 4.25 5.25 5.50 Quantity demanded (smoothies per hour) 1,000 950 800 700 550 400 300