Table 93 Shows the Cost Structure for a Perfectly Competitive Firm

question 20

Essay

Table 9.3 shows the cost structure for a perfectly competitive firm of which there are a total of 50 in the industry $$\begin{array}{l}\text { Table } 9.3\\\begin{array} { c c c } \hline \mathrm { Q } & \mathrm { MC } & \text { ATC } \\\hline 200 & 17 & 26 \\300 & 19 & 25 \\400 & 21 & 24 \\500 & 23 & 23 \\600 & 25 & 24 \\700 & 27 & 26 \\800 & 29 & 29 \\\hline\end{array}\end{array}$$ and Table 9.4 shows the market demand and market supply schedules, $\text { Table } 9.4$
$\begin{array}{ccc}\mathrm{P} & \mathrm{Qd} & \mathrm{Qs} \\\hline 17 & 80000 & 10000 \\19 & 40000 & 15000 \\21 & 20000 & 20000 \\23 & 10000 & 25000 \\25 & 5000 & 30000 \\27 & 2500 & 35000 \\29 & 1250 & 40000\end{array}$
a) What is the equilibrium price? At this price what quantity will the firm produce?
b) Is the perfectly competitive firm earning an economic profit or loss in the short-run? How much?
c) In the long run, what is the economic profit of the competitive firm?
d) What will the equilibrium price and quantity traded in the long run?
e) What quantity will the firm produce in the long-run?
f) How many firms will exist in the long-run?
g) Is the representative perfectly competitive firm achieving efficiency?

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Definitions:

Lens

A transparent, biconvex structure in the eye that focuses light rays onto the retina, enabling clear vision.

11-cis-retinal

A form of vitamin A that plays a key role in the photoreception process by changing shape when it absorbs light.

All-trans-retinal

A form of vitamin A that is involved in the visual cycle, essential for vision.

Transducin

A protein involved in the phototransduction pathway, playing a key role in converting light signals into electrical signals in the retina.