Economics 19th Edition by Stanley Brue, Cambell McConnell, Campbell McConnell, Sean Masaki Flynn, Sean Flynn

Exercise 2

A firm in a purely competitive industry is currently producing 1000 units per day at a total cost of $450. If the firm produced 800 units per day, its total cost would be $300, and if it produced 500 units per day, its total cost would be $275. What are the firm's ATC per unit at these three levels of production If every firm in this industry has the same cost structure, is the industry incompetitive equilibrium From what you know about these firms' cost structures, what is the highest possible price per unit that could exist as the market price inequilibrium If that price ends up being the market price and if the normal rate of profit iS¹0 percent, then how big will each firm's ac­counting profit per unit be