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) 100 888 80 90 70 40 Demand 30 20 10 0 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) Supply (10 firms) Supply (20 firms) Supply (30 firms) If there were 10 firms in this market, the short-run equilibrium price of rhenium would be $ . Therefore, in the long run, firms would would equilibrium. per pound. At that price, firms in this industry the rhenium market. Because you know that competitive firms earn $ economic profit in the long run, you know the long-run equilibrium price must be per pound. From the graph, you can see that this means there will be firms operating in the rhenium industry in long-run True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit. O True 0 0 False

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) 100 888 80 90 70 40 Demand 30 20 10 0 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) Supply (10 firms) Supply (20 firms) Supply (30 firms) If there were 10 firms in this market, the short-run equilibrium price of rhenium would be $ . Therefore, in the long run, firms would would equilibrium. per pound. At that price, firms in this industry the rhenium market. Because you know that competitive firms earn $ economic profit in the long run, you know the long-run equilibrium price must be per pound. From the graph, you can see that this means there will be firms operating in the rhenium industry in long-run True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit. O True 0 0 False

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter12: Firms In Perfectly Competitive Markets

Section: Chapter Questions

Problem 13P

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Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. 72 16 AVC 16 24 40 QUANTITY (Thousards of jaats) For each price in the following tabie, use the graph to determine the number of jackets this firm would produce in arder to maximize its profie. Assume that when the price is exacty equal to the average variabie cost, the firm is indifferent between producing zero jackets and the proft-maximizing quandity. Also, indicate whether the fiem wil produce, shut down, or be indiferent between the two in the short run. Lastiy, determine whether e w make a prafit, suffer a loss, ar break even at each price. Price Quantity (Dollars per jacket) (Jackets) Produce or Shut Down? Profit or Loss? 4 12 36 48 60
Consider the competitive market for rhodium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. COSTS (Dollars per pound) 80 2233 22 72 64 56 80 48 72 64 56 48 40 00 32 24 16 0 0 MCD ATC Demand 0 AVC The following graph plots the market demand curve for rhodium. -0. ☐ 3 6 9 12 15 18 21 QUANTITY (Thousands of pounds) D 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…
Economics Question
8. Short-run and long-run effects of a shift in demand Suppose that the chicken industry is in long-run equilibrium at a price of $5 per pound of chicken and a quantity of 50 million pounds per year. Suppose that WebMD claims that a protein found in chicken will increase your expected lifespan by 3 years. WebMD's claim will cause consumers to demand more chicken at every price. In the short run, firms will respond by
The accompanying graphs are for a purely competitive market in the short - run. The graphs suggest that in the long-run, assuming no changes in the given information, the market will be? MC P ATC VX Firm Industry The accompanying graphs are for a purely competitive market in the short-run. The graphs suggest that in the long-run, assuming no changes in the given information, the market
3 The graph below shows the costs and revenue curves for Dollar-Daze, a typical profit-maximizing firm in a perfectly competitive market producing Good X. Answer the following questions based on the graph below d. As the market for Good X moves into the long-run equilibrium, explain what will happen to the price of Good X and why.e. Assume the cross-price elasticity of demand between Good X and Good B is positive, what will happen to the quantity demanded of Good B given the change in the long-run price of Good X in part (d)?
can you draw a diagram of long run industry supply curve, with price on the y-axis and quantity on the x-axis, and a downward-sloping curve showing the relationship between price and quantity supplied? then also draw another diagram of long run industry supply curve, with price on the y-axis and quantity on the x-axis, and a downward-sloping curve showing the original relationship between price and quantity supplied, and a second, upward-sloping curve showing the new relationship between price and quantity supplied after the increase in the price of oil?
Use the graph below of a perfectly competitive firm to answer these questions and assume that the industry price is $P4 Price P₂ aaaa P₁ MC AVC ATC Q₁Q₂ Q3 Q4 Quantity 1. At an industry price of P4, what is the profit mazimizing level of output and what type of profit/loss is the firm earning 2. If there is a decrease in industry demand causig the industry price to fall to P2, what is the profit maximizing level output, pr position of the firm or is this firm producing in the short run? 3. What industry price represents the long run profit position for the firm?
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The let graph shows the world market for wheat. The right graph shows the cost curves and the marginal revenue curve of an individual wheat farmer at the initial long-run equilibrium The world population increases. In the left graph, draw the new demand curve. Label it Draw the market supply curve that returns the wheat market to its long-run equilibrium. Label it Draw a point to show the new long-run equilibrium price and quantity In the right graph, draw a point to show the firm's price and quantity in the long run >>>Draw only the objects specified in the question 16 124 Price (dollars per bushel) 10 P₁ 05 10 15 20 25 30 35 40 Quantity (bons of bushels per year) C Price and cost (dollars per bushel) 20 MC 10 ATC 124 M 10 MAR 200 650 100 150 200 250 300 350 400 Quantity (thousands of bushels per year) 0 a 3