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100 90 80 70 PRICE (Dollars perton) 8 588 50 20 10 0 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of tons) Demand Because you know that competitive firms earn S Supply (20 firms) If there were 20 firms in this market, the short-run equilibrium price of steel would be S Therefore, in the long run, firms would O True Supply (30 firms) False Supply (40 firms) per ton. From the graph, you can see that this means there will be per ton. At that price, firms in this industry would the steel market. economic profit in the long run, you know the long-run equilibrium price must be firms operating in the steel industry in long-run equilibrium. True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit.

100 90 80 70 PRICE (Dollars perton) 8 588 50 20 10 0 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of tons) Demand Because you know that competitive firms earn S Supply (20 firms) If there were 20 firms in this market, the short-run equilibrium price of steel would be S Therefore, in the long run, firms would O True Supply (30 firms) False Supply (40 firms) per ton. From the graph, you can see that this means there will be per ton. At that price, firms in this industry would the steel market. economic profit in the long run, you know the long-run equilibrium price must be firms operating in the steel industry in long-run equilibrium. True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit.

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter7: Production, Costs, And Industry Structure
Section: Chapter Questions
Problem 31CTQ: A common name for fixed cost is overhead. If you divide fixed cost by the quantity of output...
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PRICE (Dollars perton) 100 90 80 70 60 50 40 30 20 10 0 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of tons) Demand Because you know that competitive firms earn $ Supply (20 firms) 4 If there were 20 firms in this market, the short-run equilibrium price of steel would be S ♥ Therefore, in the long run, firms would True Supply (30 firms) O False Supply (40 firms) per ton. From the graph, you can see that this means there will be per ton. At that price, firms in this industry would the steel market. economic profit in the long run, you know the long-run equilibrium price must be firms operating in the steel industry in long-run equilibrium. True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit.
Transcribed Image Text:PRICE (Dollars perton) 100 90 80 70 60 50 40 30 20 10 0 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of tons) Demand Because you know that competitive firms earn $ Supply (20 firms) 4 If there were 20 firms in this market, the short-run equilibrium price of steel would be S ♥ Therefore, in the long run, firms would True Supply (30 firms) O False Supply (40 firms) per ton. From the graph, you can see that this means there will be per ton. At that price, firms in this industry would the steel market. economic profit in the long run, you know the long-run equilibrium price must be firms operating in the steel industry in long-run equilibrium. True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit.
Consider the competitive market for steel. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. V AVC COSTS (Dollars per ton) 100 882 889 80 20 0 MC 5 25 30 35 QUANTITY (Thousands of tons) 15 20 10 45 40 50 The following diagram shows the market demand for steel.
Transcribed Image Text:Consider the competitive market for steel. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. V AVC COSTS (Dollars per ton) 100 882 889 80 20 0 MC 5 25 30 35 QUANTITY (Thousands of tons) 15 20 10 45 40 50 The following diagram shows the market demand for steel.
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