Question

Concept: Long-Run Equilibrium 1 Farmer Lee grows oranges. The average total cost and marginal cost of growing oranges in the long run for an individual farmer are illustrated in the graph to the right MCT Suppose the market price is $25.71 per box. If so, then farmers will enter the market for oranges until the market price is $ per box. (Enter a numeric response using a real number rounded to two decimal places.) x32- o 28 2 24 12 4 0 10 20 30 40 50 60 70 80 9r Quantity of oranges (boxes per week)

I put down $20, but it was marked incorrect.

Answer 1

In the long run equilibrium is achieved at that point where price = Marginal cost = minimum of average total cost /variable cost.

In the adjoining graph Marginal cost is equal to minimum of average total cost curve at price $18.

So the farmers will enter the market for oranges untill the market price is $18 because it is profitable for them to continue production till the market price is equal to or greater than $18.