Question

The minimum feasible long-run average cost for firms in a perfectly competitive industry is $\$40$per unit. If every firm in the industry currently is producing an output consistent with a long-run equilibrium, what is the marginal cost incurred by each firm? What is the market price?

Short answer

Cost similarly as value would be $\$40$per unitadditionally.

Step-by-step solution

Introduction

In thelong term, a firm achieves equilibrium when it adjusts its plant/sto supply output at the minimum point of their long-runcost (AC) curve. This curve is tangential to themarket value defined demand curve.within the future, a firm just earns normal profits. If a firm earns supernormal profitswithin the short run, then the industry will attract new firms into it.

Given Information

The minimum feasible long-runcost for firmsin a very perfectly competitive industry is per unit.

Explanation

It has been stated that each firm in given perfectly competitive industry is producing an output coinciding with long-run equilibrium. As one knows, in long-run equilibrium position, price equals marginal revenue which equals price which successively is capable minimum feasible long-run also as short-runprice.

It has been only if minimum feasible long-run monetary value for firms of given perfectly competitive industry is$\$40$ per unit.
So, cost similarly as value would be $\$40$per unitadditionally.