The market for apple pies in the city of Ectenia is competitive and has the following
Chapter 14, Problem Problems and Applications 14.10(choose chapter or problem)
The market for apple pies in the city of Ectenia is competitive and has the following demand schedule: Price Quantity Demanded $ 1 1,200 pies 2 1,100 3 1,000 4 900 5 800 6 700 7 600 8 500 9 400 10 300 11 200 12 100 13 0 Each producer in the market has fixed costs of$9 and the following marginal cost:Quantity Marginal Cost1 pie $ 22 43 64 85 106 12a. Compute each producers total cost andaverage total cost for 1 to 6 pies.b. The price of a pie is now $11. How many piesare sold? How many pies does each producermake? How many producers are there? Howmuch profit does each producer earn?c. Is the situation described in part (b) along-run equilibrium? Why or why not?d. Suppose that in the long run there is freeentry and exit. How much profit does eachproducer earn in the long-run equilibrium?What is the market price and number ofpies each producer makes? How many piesare sold? How many pie producers areoperating?
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