6. Short-run perfectly competitive equilibrium Consider a perfectly competitive market for wheat in Dallas. There are 120 firms in the industry, each of which has the cost curves shown on the following graph: 100 90 80 60 ATC COST (Cents per bushel) 30 g 70 20 20 10 10 0 AVC MC + 0 5 10 15 20 25 30 35 40 45 50 QUANTITY OF OUTPUT (Thousands of bushels) The following graph shows the market demand for wheat. Use the orange points (square symbol) to plot the short-run industry supply curve for the wheat industry. Specifically, place an orange point at the lowest point of the supply curve and another orange point at the highest point of the supply curve. (Note: You can disregard the portion of the supply curve that corresponds to prices where there is no output, since this is the industry supply curve. Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.) 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.) 100 Demand 90 (?) 0 0 5 10 15 20 25 30 35 40 45 50 QUANTITY OF OUTPUT (Thousands of bushels) The following graph shows the market demand for wheat. Use the orange points (square symbol) to plot the short-run industry supply curve for the wheat industry. Specifically, place an orange point at the lowest point of the supply curve and another orange point at the highest point of the supply curve. (Note: You can disregard the portion of the supply curve that corresponds to prices where there is no output, since this is the industry supply curve. Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.) 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 (Cents per bushel) 100 Demand 90 80 70 60 50 40 30 20 10 10 0 0 600 1200 1800 2400 3000 3600 4200 4800 5400 6000 QUANTITY OF OUTPUT (Thousands of bushels) At the current short-run market price, firms will given the current market price. 口 Supply Curve Equilibrium some firms will enter some firms will exit firms will neither enter nor exit in the short run. In the long run, the market