Suppose That the Perfectly Competitive Market for Granola Bars Is

question 130

Multiple Choice

Suppose that the perfectly competitive market for granola bars is made up of identical firms with long-run total cost functions given by TC(Q) =8Q³-40Q² + 200Q. Assume that these cost functions are independent of the number of firms in the market and that firms may enter or exit the market freely. Market demand is Q^D = 8,000 - 3.5P, where price is in cents. In the long-run equilibrium, each firm produces a quantity of ____ bars.

• A) 3.5
• B) 3
• C) 2.5
• D) 2