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-(Table: Cherry Farm)Use Table: Cherry Farm.Suppose there are 100 farms in this industry with identical cost curves,as shown in the table.If all farms are the same size,how much economic profit will each farm earn when the industry is in long-run equilibrium?

Question

Use the following to answer question: 
-(Table: Cherry Farm)Use Table: Cherry Farm.Suppose there are 100 farms in this industry with identical cost curves,as shown in the table.If all farms are the same size,how much economic profit will each farm earn when the industry is in long-run equilibrium?

Quizplus · Accepted Answer

In long-run equilibrium, firms in a perfectly competitive market earn zero economic profit. In this case, we can see that at the quantity of 10,000 pounds, which is the equilibrium quantity, the market price is $20 per pound. At this price, each individual farm's total revenue is $200,000, and their total cost is $200,000. Therefore, each farm earns zero economic profit.

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