Suppose the market for coffee is characterized by perfect competition. Assume that all firms are identical. The long run average total cost (LATC) and long run Marginal cost function (LMC) functions for a representative firm are given as:  LATC = Q + 5 + 25/Q and LMC = 2Q + 5. Total demand from all consumers in this market is given by P = 500 – Q What quantity will a firm produce in the long run? a. 10 units b. 15 units c. 20 units d. Zero units e. 5 units 2. What is the price that each firm will change in the long run? a. $15 b. $20 c. $30 d. $40 e. $50 How many units will be traded in the market in the long run? a. 1000 b. 970 c. 950 d. 900 e. 485

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