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Variable Cost Marginal Cost (# tables) Total Cost $150 175 210 255 Fixed Cost $150 150 150 0 N/A 25 25 150 105 Average Total12. Can the market price of $85 be the long-run equilibrium price? If so, how do you know? If not, what will be the long-run

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Answer - No , $ 85 cannot be the equilibrium price in the long run for this firm. This is because , at any level $ 85 is not equal to both MC and AC which is an essential condition for the equlibrium in the long run in perfect competition.

The price should be $ 75 because at the output level of 6 units MC and AC are equal to $ 75 , which will be equilirbium condition in the long run for this firm.

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