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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 15 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 20 firms. PRICE (Dollars per pound) 100 90 80 70 60 50 Supply (10 firms) Supply (15 firms) 40 A Demand Supply (20 firms) 30 20 110 10 ? ° 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) enter exit neither enter nor exit If there were 20 firms in this market, the short-run equilibrium price of copp would operate at a loss Therefore, in the long run, firms would exit Jer pound. At that price, firms in this industry the copper market. Because you know that competitive firms earn $ per pound. From the graph, you can see that this means there will be economic profit in the long run, you know the long-run equilibrium price must be firms operating in the copper industry in long-run equilibrium.

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 15 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 20 firms. PRICE (Dollars per pound) 100 90 80 70 60 50 Supply (10 firms) Supply (15 firms) 40 A Demand Supply (20 firms) 30 20 110 10 ? ° 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) enter exit neither enter nor exit If there were 20 firms in this market, the short-run equilibrium price of copp would operate at a loss Therefore, in the long run, firms would exit Jer pound. At that price, firms in this industry the copper market. Because you know that competitive firms earn $ per pound. From the graph, you can see that this means there will be economic profit in the long run, you know the long-run equilibrium price must be firms operating in the copper industry in long-run equilibrium.

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter13: Firms In Competitive Markets
Section: Chapter Questions
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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 15 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 20 firms. PRICE (Dollars per pound) 100 90 80 70 60 50 Supply (10 firms) Supply (15 firms) 40 A Demand Supply (20 firms) 30 20 110 10 ? ° 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) enter exit neither enter nor exit If there were 20 firms in this market, the short-run equilibrium price of copp would operate at a loss Therefore, in the long run, firms would exit Jer pound. At that price, firms in this industry the copper market. Because you know that competitive firms earn $ per pound. From the graph, you can see that this means there will be economic profit in the long run, you know the long-run equilibrium price must be firms operating in the copper industry in long-run equilibrium.
Transcribed Image Text: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 15 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 20 firms. PRICE (Dollars per pound) 100 90 80 70 60 50 Supply (10 firms) Supply (15 firms) 40 A Demand Supply (20 firms) 30 20 110 10 ? ° 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) enter exit neither enter nor exit If there were 20 firms in this market, the short-run equilibrium price of copp would operate at a loss Therefore, in the long run, firms would exit Jer pound. At that price, firms in this industry the copper market. Because you know that competitive firms earn $ per pound. From the graph, you can see that this means there will be economic profit in the long run, you know the long-run equilibrium price must be firms operating in the copper industry in long-run equilibrium.
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