Each widget firm has the cost structure illustrated in the left graph below. The right graph illustrates two different possible demand curves for widgets, D1 and D2. MC ATC Đ2 AVC D1 0123456789 1011 12g 1200 2400 Suppose the required assumptions for a perfectly elastic long run supply curve hold for the widget industry. Also, assume that the demand for widgets is depicted by the demand curve D1, and that the industry is in long-run equilibrium. What is the long- run output (quantity produced) for the entire industry? O 1600 O 1200 O 2000 O800 400

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Each widget firm has the cost structure illustrated in the left graph below. The right graph illustrates two different possible
demand curves for widgets, D1 and D2.
MC
ATC
D2
AVC
D1
0123456789 10 11
400
1200
1500
2000
2400
2000
Suppose the required assumptions for a perfectly elastic long run supply curve hold for the widget industry. Also, assume that
the demand for widgets is depicted by the demand curve D1, and that the industry is in long-run equilibrium. What is the long-
run output (quantity produced) for the entire industry?
O 1600
1200
2000
O 800
O 400
Previous
Transcribed Image Text:Each widget firm has the cost structure illustrated in the left graph below. The right graph illustrates two different possible demand curves for widgets, D1 and D2. MC ATC D2 AVC D1 0123456789 10 11 400 1200 1500 2000 2400 2000 Suppose the required assumptions for a perfectly elastic long run supply curve hold for the widget industry. Also, assume that the demand for widgets is depicted by the demand curve D1, and that the industry is in long-run equilibrium. What is the long- run output (quantity produced) for the entire industry? O 1600 1200 2000 O 800 O 400 Previous
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