Table 91 Shows the Cost Structure for a Perfectly Competitive Firm

question 69

Essay

Table 9.1 shows the cost structure for a perfectly competitive firm of which there are a total of 100 in the industry $$\begin{array}{l}\text { Table } 9.1\\\begin{array} { c c c } \hline \mathrm { Q } & \mathrm { MC } & \text { ATC } \\\hline 60 & 30 & 43 \\70 & 35 & 41 \\80 & 40 & 40 \\90 & 45 & 41 \\100 & 50 & 43 \\110 & 55 & 46 \\120 & 60 & 50 \\\hline\end{array}\end{array}$$ and Table 9.2 shows the market demand and market supply schedules, $$\begin{array}{l}\text { Table } 9.2\\\begin{array} { c c c } \hline \mathrm { P } & \mathrm { Qd } & { \text { Qs } } \\\hline 30 & 12000 & 6000 \\35 & 11000 & 7000 \\40 & 10000 & 8000 \\45 & 9000 & 9000 \\50 & 8000 & 10000 \\55 & 7000 & 11000 \\60 & 6000 & 12000 \\\hline\end{array}\end{array}$$ 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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