(17) (E)
Equilibrium is at point E, where D & S curves intersect. Industry output is 80,000 and firm output is 40, so there are (80,000/40) = 2,000 firms.
(18) (C)
Equilibrium is at point F, where D1 & S curves intersect with higher price P1. Industry output is 120,000 and firm output is 60, so there are (120,000/60) = 2,000 firms.
(19) (B)
New Equilibrium is at point F, where D1 & S curves intersect with higher price P1. Corresponding profit [= Output x (Price - ATC)] is area P1ZNQ.
(20) (D)
In long run, equilibrium is at point G where D1 intersects the new, right-shifted supply curve (with original price) with industry output of 160,000 and firm output 40, so number of firms is (160,000/40) = 4,000.
NOTE: As per Answering Policy, 1st 4 questions are answered.
Identical firms like this Price Price MC 40 60 Qunnity 80,000 120,000 180,000 The next four...
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