Question 12
HardOriginal questionIn a market with free entry and exit, every firm has minimum AC of ₹12. Market demand is Qd = 600 − 20P. In long-run equilibrium, how much is sold?
Show the answer and explanation
CorrectNot quiteAnswer C
Correct answer: C
Explanation
With free entry and exit, the long-run price settles at minimum AC: ₹12.
Quantity = 600 − 20 × 12 = 360 units.
- Concept
- Long-run equilibrium with free entry
- Typical timeTypical
- 100 s
- Your timeYours
- —
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