Let's solve each part step by step: --- **Given Table:** | Quantity | VC ($) | MC ($) | AVC ($) | TC ($) | ATC ($) | |----------|--------|--------|---------|--------|---------| | 10 | 500 | 50 | 50 | 1,000 | 100 | | 20 | 900 | 40 | 45 | 1,500 | 75 | | 30 | 1,700 | 80 | 57 | 2,700 | 90 | | 40 | 4,400 | 110 | 110 | 5,400 | 135 | | 50 | 8,000 | 160 | 160 | 9,900 | 180 | | 60 | 14,000 | 233 | 233 | 15,000 | 250 | --- ## **a. Price in the market is $110, and all firms have identical cost structures. Is the market in long-run equilibrium?** **Step 1: Find the minimum ATC (Average Total Cost):** From the table, ATC values are: 100, 75, 90, 135, 180, 250. The **minimum ATC is $75** (at Q = 20). **Step 2: Long-run equilibrium in perfectly competitive markets:** - In long-run equilibrium: **Price = minimum ATC** - Here, **Price = $110** and **min ATC = $75**. **Step 3: Conclusion:** - Since **Price > min ATC**, firms are making an **economic profit**. - In the long run, new firms would enter, driving price down to the minimum ATC. **Final Answer (a):** > **No**, the market is **not** in long-run equilibrium. --- ## **b. Price is $110, but firms in the market may have different cost structures. Is the market in long-run equilibrium?** **Step 1: Different cost structures:** - Not all firms have the same minimum ATC. - Some firms may have higher ATC, some lower. **Step 2: Long-run equilibrium:** - In the long run, only firms with ATC ≤ price will survive. - Firms with ATC < price will make a profit. - As long as there are firms with ATC < price, more firms will enter, and the process will continue. **Step 3: Conclusion:** - The market cannot be in long-run equilibrium if some firms are making a positive economic profit (Price > min ATC). **Final Answer (b):** > **No**, the market is **not** in long-run equilibrium. --- **Summary Table:** | Sub-part | Final Answer | Explanation | |----------|--------------|-------------| | a | No | Price > min ATC, so not in long-run equilibrium. | | b | No | Firms with ATC < price make profit, so not in long-run equilibrium. | Let me know if you want further explanation!