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    Long-Run Equilibrium

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    A number of stores offer film developing as a service to their customers. Suppose that each store offering this service has a cost function C(q) = 50 + 0.5q + 0.08q2 and a marginal cost MC = 0.5 + 0.16q.

    Q: If the going rate for developing a roll of film is $8.50, is the industry in long-run equilibrium? If not, find the price associated with long-run equilibrium.

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    https://brainmass.com/economics/general-equilibrium/long-run-equilibrium-summary-29538

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    From the cost function, we know the firm's MC = d C(q) / dq = 0.5 + 0.16q
    While its SRAC = C / q = 50/q + 0.5 + ...

    Solution Summary

    If the going rate for developing a roll of film is $8.50, is the industry in long-run equilibrium? If not, find the price associated with long-run equilibrium.

    $2.19

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