Suppose there are 8 firms in this industry, each of which has the cost curves previously shown.On the following graph, use the orange points (square symbol) to plot points along the portion of the industry's short-run supply curve thatcorresponds to prices where there is positive output. (Note: You are given more points to plot than you need.) Then, place the black point (plussymbol) on the graph to indicate the short-run equilibrium price and quantity in this market.Note: Dashed drop lines will automatically extend to both axes.10089080 Demand70PRICE (Dollars per shirt)8605040201000+80 160 240 320 400 480 560 640 720 800QUANTITY (Thousands of shirts)At the current short-run market price, firms willIndustry's Short-Run SupplyEquilibriumin the short run. In the long run,? Consider the competitive market for dress shirts. The following graph shows the marginal cost (MC), average total cost (AIC), and average variablecost (AVC) curves for a typical firm in the industry.COSTS (Dollars)PRICE (Dollars per shirt)100908070605040100309020801070Price(Dollars per shirt)152025557085060504030201000For each price in the following table, use the graph to determine the number of shirts this firm would produce in order to maximize its profit. Assumethat when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero shirts and the profit-maximizing0+10quantity. Also, indicate whether the firm will produce, shut down, or be indiferent between the two in the short run. Lasty, determine whether it willmake a profit, suffer a loss, or break even at each price.00MC DDOn the following graph, use the orange points (square symbol) to plot points along the portion of the firm's short-run supply curve that correspondsto prices where there is positive output. (Note: You are given more points to plot than you need.)+10 20OATCAVC20 30 40 50 6060 70QUANTITY (Thousands of shirts)30 40 50☐Quantity(Shirts)070 80 90 10060 20?Produce or Shut Down?80 90 100Profit or Loss?--0-Firm's Short-Run Supply(?)

Cost curves represent the various levels of costs paid throughout the production of goods. As the…

Suppose there are 8 firms in this industry, each of which has the cost curves previously shown. On the following graph, use the orange points (square symbol) to plot points along the portion of the industry's short-run supply curve that corresponds to prices where there is positive output. (Note: You are given more points to plot than you need.) Then, place the black point (plus symbol) on the graph to indicate the short-run equilibrium price and quantity in this market. Note: Dashed drop lines will automatically extend to both axes. PRICE (Dollars per shirt) 100 90 80 Demand 70 60 50 40 30 20 10 0 0 80 160 240 320 400 480 560 640 720 800 QUANTITY (Thousands of shirts) At the current short-run market price, firms will Industry's Short-Run Supply Equilibrium in the short run. In the long run,

Suppose there are 8 firms in this industry, each of which has the cost curves previously shown. On the following graph, use the orange points (square symbol) to plot points along the portion of the industry's short-run supply curve that corresponds to prices where there is positive output. (Note: You are given more points to plot than you need.) Then, place the black point (plus symbol) on the graph to indicate the short-run equilibrium price and quantity in this market. Note: Dashed drop lines will automatically extend to both axes. PRICE (Dollars per shirt) 100 90 80 Demand 70 60 50 40 30 20 10 0 0 80 160 240 320 400 480 560 640 720 800 QUANTITY (Thousands of shirts) At the current short-run market price, firms will Industry's Short-Run Supply Equilibrium in the short run. In the long run,

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 7.15P

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