Suppose that for each firm in the competitive market for potatoes,long-run average cost is minimized at $0.20 per pound when 500 pounds are grown.The demand for potatoes is Q = 10,000/p.If the long-run supply curve is horizontal,then how many pounds of potatoes will be consumed in total?

Question

Quizplus · Accepted Answer

In a competitive market with a horizontal long-run supply curve, the price equals the minimum of the long-run average cost, which is $0.20 per pound. Substituting this price into the demand equation Q = 10,000/p gives Q = 10,000/0.20 = 50,000 pounds.

Suppose That for Each Firm in the Competitive Market for Potatoes,long-Run