The following diagram shows the market demand for steel. Use the orange points (square symbol) to plot the Initial short-run Industry supply curve when there are 20 firms in the market. (Hint: 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.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 40 firns. 100 90 Supply (20 firms) 80 70 60 Suply (30 frms) 50 40 Seply (40 frma) Demand 30 20 20 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thausands of tans) If there were 30 firms in this market, the short-run equilibrum price of steel would be s . Therefore, In the long run, firms would | per ton. At that price, firms in this industry would the steel market. Because you know that perfectly competitive firms earn v economic profit in the long run, you know the long-run equilibrium price must be per ton. From the graph, you can see that this means there will be firms operating in the steel Industry in long-run equilibrium. (us nd spa) aoad

The following diagram shows the market demand for steel. Use the orange points (square symbol) to plot the Initial short-run Industry supply curve when there are 20 firms in the market. (Hint: 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.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 40 firns. 100 90 Supply (20 firms) 80 70 60 Suply (30 frms) 50 40 Seply (40 frma) Demand 30 20 20 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thausands of tans) If there were 30 firms in this market, the short-run equilibrum price of steel would be s . Therefore, In the long run, firms would | per ton. At that price, firms in this industry would the steel market. Because you know that perfectly competitive firms earn v economic profit in the long run, you know the long-run equilibrium price must be per ton. From the graph, you can see that this means there will be firms operating in the steel Industry in long-run equilibrium. (us nd spa) aoad

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The following diagram shows the market demand for steel. Use the orange points (square symbol) to plot the short-run industry supply curve when there are 20 firms in the market. (Hint: 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.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 40 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 60 firms. PRICE (Dollars per ton) 80 72 Supply (20 firms) 64 58 Demand 48 Supply (40 firms) 40 32 2 24 16 8 ° 0 120 240 360 480 600 720 840 960 1080 1200 QUANTITY OF OUTPUT (Thousands of tons) Supply (60 firms) ? If there were 60 firms in this market, the short-run equilibrium price of steel would be $ Therefore, in the long run, firms would Because you know that perfectly competitive firms earn be $ per ton. At that price, firms in this industry…
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The following graph plots the market demand curve for ruthenium. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 10 firms in the market. (Hint: 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.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 20 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 30 firms. PRICE (Dollars per pound) 80 72 64 03 58 Supply (10 firms) 48 Demand Supply (20 firms) 40 32 24 16 8 0 0 120 240 350 480 600 720 840 960 1080 1200 QUANTITY (Thousands of pounds) Supply (30 firms) ? If there were 20 firms in this market, the short-run equilibrium price of ruthenium would be $ would Therefore, in the long run, firms would per pound. At that price, firms in this industry the ruthenium market. Because you…
7. Short-run supply and long-run equilibrium Consider the perfectly 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. COSTS (Dollars per ton) 100 90 80 70 60 50 40 ATC 30 20 10 + MC AVC 0 0 5 10 15 20 25 30 35 40 45 50 QUANTITY OF OUTPUT (Thousands of tons) The following diagram shows the market demand for steel. ⑦? Use the orange points (square symbol) to plot the short-run industry supply curve when there are 20 firms in the market. (Hint: 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.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry…