Assuming that the licorice industry is perfectly competitive: Each of the industry’s identical firms produces 2 million strings of licorice per year. The strings have an average cost of $0.20 each, and they sell for $0.30 each.
My would be question:
What is the marginal cost of strings and also why is that and is this industry in long-run equilibrium? Why or why not?
Many thanks 🙂