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An industry consists of 100 firms ("type A") with marginal cost of $10 and 100 with...

An industry consists of 100 firms ("type A") with marginal cost of $10 and 100 with marginal cost of $20 ("type B"). There are no fixed costs and no more than 100 firms with $10 marginal cost can possibly exist. Explain why the equillibrium price in this market will not be $15. What will it be ? Explain
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Answer #1

The reason that marginal cost is 10 and there are many firms in the market which makes the industry competitive and this keeps the marginal revenue or price to be $10 itself forcing other firms to leave the industry whose average variable cost if more than price all in all.

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