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    Long-Run Equilibrium

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    Answer based on the two figures below. Suppose that all the firms in a given market can be characterized by the cost structure illustrated in the figure on the left. If market demand is an indicated in the figure on the right, the number of firms required to support long run equilibrium is (unless the answer is: "a number greater than 50 that cannot be determined with information provided", please give exact number - thank you):

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    Solution Preview

    The firms will try to minimize its total cost by choosing output level at q=10, from the left figure. (Because in the long run, all the factors are ...

    Solution Summary

    The long-run equilibrium for a cost structure is found. The solution answers the question(s) below.