Question

If the price chosen by the City Commission is the price required for efficient allocation of resources, in the long run how many homes will ACME Hauling serve each month, assuming that it receives no other source of revenue?

Answer 1

hi your question is incomplete here is the complete question and attached its the graph as well

If the price chosen by the City Commission is the price required for efficient allocation of resources, in the long run how many homes will ACME Hauling serve each month, assuming that it receives no other source of revenue?

A) 9,000

B) 8,000

C) 5,500

D) 0

Answer : 0 ( D )

Step-by-step explanation:

If the price required for efficient allocation of resources is the price chosen by the city commission which means that the marginal cost curve has to intersect the demand curve the price chosen then is $25

at $25 the company is producing at its maximum capacity of 8000 unit but at this rate of production the average cost of production is greater that the price chosen by the city commission ( $25 ) therefore in the long run ACME hauling service will serve no home because they would incur losses and not profits.

Answer 2

a)8000

Step-by-step explanation:

The price chosen by the City Commission which is the price required for efficient allocation of resources, in the long run, and the number of homes that the ACME Hauling serve each month, assuming that it receives no other source of revenue, therfore estimating from this graph, the firm would produce 8000 units of output.

This is possible because of the allocation of resources is efficient, and there is a need for the firm to produce the output in a way it contains the equality of price and the marginal cost.

LONG-RUN can be defined as the period of time in which there is enough time for the firm to change the scale of the production of a firm.

However there is factor inputs which are variable in nature in the long run, and this brings about the consideration of variable costs in the overall cost of a firm.