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juin [17]
3 years ago
6

Suppose that for each firm in the competitive market for potatoes, long-run average cost is minimized at $0.6 per pound when 150

pounds are grown. The demand for potatoes is Q = 40,000/p. If the long-run supply curve is horizontal, then what would be the total consumer spending?
Mathematics
1 answer:
mihalych1998 [28]3 years ago
6 0

Answer:

Total consumer spending is 160

Step-by-step explanation:

Here , we are interested in calculating the total consumer spending.

In a long run perfect competition market, price interest with MC and minimum point of AC

Hence , P = AC

this means that Q = 40,000/P = 40,000/150 = 266.67 which is approximately 267 potatoes will be consumed

The total consumer spending is thus 267 * 0.6 = 160

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