The Long-Run Supply Curve for a Product Is Horizontal with ATC

question 9

Multiple Choice

The long-run supply curve for a product is horizontal with ATC = 200.Market demand is defined as P = 1,000 - 5Q.The market is competitive and is in long-run equilibrium with 40 firms in the industry.If a $50 tax is imposed on sellers,how many firms will be in the industry at the new long-run equilibrium?

• A) 44.
• B) 37.
• C) 32.
• D) 29.
• E) 28.

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