In the Lemonade Stand Industry, Lucia Is Representative of a Low-Cost

Essay

In the lemonade stand industry, Lucia is representative of a low-cost provider and Carlos is representative of a high-cost provider. The minimum average total cost of the high-cost producers is $5. The low-cost producers have a long-run total cost curve given by LTC = 5Q -1.5Q² + 0.33Q³, where LMC = 5 - 3Q + Q². How much economic rent does a low-cost producer, such as Lucia, earn?