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An industry currently has 100 firms, all of which have fixed costs of $16 and average variable cost as follows: Quantity Average Variable Cost 1............ $1 2.............2 3.............3 4.............4 5.............5 6.............6 a. Compute marginal cost and average total cost. b. The price is currently $10. What is the total quantity supplied in the market? c. As this market makes the transition to its long-run equilibrium, will the price rise or fall? Will the quantity demanded rise or fall? Will the quantity supplied by each firm rise or fall? d. Graph the long-run supply curve for this market.
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