Multiple Choice
Suppose that the perfectly competitive market for granola bars is made up of identical firms with long-run total cost functions given by TC(Q) =8Q3-40Q2 + 200Q. Assume that these cost functions are independent of the number of firms in the market and that firms may enter or exit the market freely. Market demand is QD = 8,000 - 3.5P, where price is in cents. In the long-run equilibrium, each firm produces a quantity of ____ bars.
A) 3.5
B) 3
C) 2.5
D) 2
Correct Answer:
Verified
Correct Answer:
Verified
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