1- (20 pts) Consider a competitive industry. All firms are identical with Average Total Cost given...

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1- (20 pts) Consider a competitive industry. All firms are identical with Average Total Cost given by: ATC=(q10)2 + 1 + N where q is the individual firm level of output and N is the number of firms. Suppose that market demand is Qd = 100-p. (a) Is this a constant, increasing, or decreasing-cost industry? What does it imply for the slope of the long run supply curve? (b) Find the long run competitive firm's output (the minimum efficient scale of production) q, the long-run equilibrium market price p*, and the long-run equilibrium number of firms N.. 1- (20 pts) Consider a competitive industry. All firms are identical with Average Total Cost given by: ATC=(q10)2 + 1 + N where q is the individual firm level of output and N is the number of firms. Suppose that market demand is Qd = 100-p. (a) Is this a constant, increasing, or decreasing-cost industry? What does it imply for the slope of the long run supply curve? (b) Find the long run competitive firm's output (the minimum efficient scale of production) q, the long-run equilibrium market price p*, and the long-run equilibrium number of firms N..

Answer rating: 100% (QA)

a To determine whether the industry is a constant increasing or decreasingcost industry we need to examine the Average Total Cost ATC function The giv... View the full answer