Question

Suppose that the market price for a bottle of vitamins is $2.55 and that at that price the total market quantity demanded is 113,250,000 bottles. How many firms will there be in this industry?

Answer 1

Answer: Incomplete data

Step-by-step explanation:

But,

In the long run, the number of firms that exist in the industry is found from the following conditions: The firms will produce at the minimum point of their ATC. this happens when MC= ATC. For this to be calculated we need the cost functiosn equations which is not given in the data. From this MC=ATC condition, we can find the number of units produced in each firm.the long run price will be equal to ATC when MC=ATC. Thus we can get the long run price from this...

Market price equals marginal cost (MC) where P = MC = $2.55 and Q = ???? (individual firm output).

Number of firms = 113,250,000/ ????? = to the number of firms

Hope you can relate to the answer.