Short Answer
Suppose the bobby pin industry is perfectly competitive.The price of a packet of bobby pins is $2.00.Pins and Needles,Inc.is a firm in this industry and is producing 1,000 packets of bobby pins per day at the point where the MC = MR.The average cost of production at this output level is $1.50 per packet.
a.What is the marginal cost of the 1,000th packet?
b.Is this firm making an economic profit,zero economic profit,or an economic loss? How much?
c.Is the firm in long-run equilibrium? Why or why not?
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a.The price per packet is $2,which is al...View Answer
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