Asked by Briana Quist on Jun 19, 2024
Verified
(Figure: Game-Day Shirts) Use Figure: Game-Day Shirts.Rick is one of 10 vendors who sell game-day T-shirts at football games in a perfectly competitive market.His costs are identical to the costs of the other 9 vendors.When the industry is in long-run equilibrium,the price of each shirt will be _____,and the total quantity supplied in the market will be _____.
A) $6;0
B) $9;200
C) $11;220
D) $14;240
Long-run Equilibrium
It describes a state in which all factors of production and market forces are balanced, and no external pressures exist for change within an economic model.
Perfectly Competitive Market
A market structure characterized by many buyers and sellers, where no single entity can influence the market price of a homogeneous product.
Total Quantity Supplied
The overall amount of a good or service that producers are willing to sell at a given price over a specific period.
- Define the conditions conducive to achieving long-run equilibrium in perfectly competitive markets.
- Elucidate the aspects of a perfectly competitive sector that foster efficiency.
Verified Answer
SD
Susan De vasconcellosJun 24, 2024
Final Answer :
C
Explanation :
In a perfectly competitive market in long-run equilibrium, the price will be equal to the minimum average total cost (MC = MR = min. ATC). Based on the figure, the minimum ATC is at a price of $11. At this price, each vendor would supply 22 shirts ($220 total quantity supplied in the market). Therefore, the correct answer is (C) $11; 220.
Learning Objectives
- Define the conditions conducive to achieving long-run equilibrium in perfectly competitive markets.
- Elucidate the aspects of a perfectly competitive sector that foster efficiency.