Suppose the figure illustrates the long-run average cost curve (AC) and the marginal cost curve (MC) for a representative firm in a perfectly competitive market. Assume all firms in the industry have the same cost structure. The other figure illustrates the market, with a market supply curve (S) and a market demand curve (D). How many firms are there initially? The industry has firms. (Enter your response as an integer value.) 3 pages Grapher ayer.aspx?cultureld=en-us&theme=econ&style=highered&disableStandhuli Price (dollars per unit) Price (dollars per unit) 64.00 60.00 56.00 52.00- 48.00- 44,00 40.00 36.00- 32.00- 28,00 8 24.00 20.00- 16.00- 12.00- 8.00- 4.00- 0.00 64.00- 60.00 56.00 52.00 48.00- 44.00- 40.00 36.00 32.00- 28,00 24.00 a 20.00 16.00- 0 Quantity S MC Clear all AC 10 Q Q

Suppose the figure illustrates the long-run average cost curve (AC) and the marginal cost curve (MC) for a representative firm in a perfectly competitive market. Assume all firms in the industry have the same cost structure. The other figure illustrates the market, with a market supply curve (S) and a market demand curve (D). How many firms are there initially? The industry has firms. (Enter your response as an integer value.) 3 pages Grapher ayer.aspx?cultureld=en-us&theme=econ&style=highered&disableStandhuli Price (dollars per unit) Price (dollars per unit) 64.00 60.00 56.00 52.00- 48.00- 44,00 40.00 36.00- 32.00- 28,00 8 24.00 20.00- 16.00- 12.00- 8.00- 4.00- 0.00 64.00- 60.00 56.00 52.00 48.00- 44.00- 40.00 36.00 32.00- 28,00 24.00 a 20.00 16.00- 0 Quantity S MC Clear all AC 10 Q Q

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Explain why the firm will still operate in the market if the economic profits are equal to zero. Use the graph to support your answer.
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Concept: Calculate Profit Farmer Jones grows sugar. The average total cost and marginal cost of growing sugar for an individual farmer are illustrated in the graph to the right. Assume the rharket for sugar is perfectly competitive. According to the graph, farmer Jones will earn profit (positive economic profit as opposed to losses) at any market price above $10 per bushel. (Enter a numeric response using an integer.) Assume that the market price specifically is $24 per bushel. If farmer Jones produces the profit maximizing quantity, what will be her profit? $ To more easily identify the price and quantity, click on the graph to the right, and then adjust the slider to change the price and quantity. Each increment will increase the price by $2. Enter your answer in the answer box and then click Check Answer. 40- 36- 32- MC 28- 24- 20- Price and cost (dollars per bushel) 12- ATC 46 20 30 40 50 60 70 80 90 100 Quantity of Sugar (bushels per month) Question Help Q
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