Good W Is Produced in a Competitive Industry with Increasing

question 13

Multiple Choice

Good W is produced in a competitive industry with increasing costs of production.The figure below shows how a typical firm's long-run average cost curve shifts upward as industry output of good W expands.With 50 firms in the industry,each firm faces an identical long-run average cost curve given by LAC.With 80 firms in the industry,each firm faces an identical long-run average cost curve given by LAC'.And with 120 firms in the industry,each firm faces an identical long-run average cost curve given by LAC''. When industry output in long-run competitive equilibrium is 96,000,the long-run average cost (LAC) of producing 96,000 units of good W is $_________ and each firm in the industry earns $________ of economic profit.

• A)$6; $14,000
• B)$10; $14,000
• C)$12; $14,000
• D)none of the above

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