7. Short-run supply and long-run equilibriumConsider the competitive market for copper. 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. The following diagram shows the market demand for copper. 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. If there were 20 firms in this market, the short-run equilibrium price of copper would be ___ per pound. At that price, firms in this industry would (shutdown / earn a positive profit / operate at a loss / earn cero profit ). Therefore, in the long run, firms would (enter / exit / neither) the copper market. Because you know that competitive firms earn (negative / positive / zero) 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 (10/15/20) firms operating in the copper industry in long-run equilibrium. (True or False): Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns positive accounting profit. 7. Short-run supply and long-run equilibriumConsider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical andfaces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph.(?)100908070605040ATC3020AVC10MC O102030405060708090100QUANTITY (Thousands of pounds)The following diagram shows the market demand for copper.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 candisregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use thepurple points (diamond symbol) to plot the short-run industry supply curve when there are 15 firms. Finally, use the green points (triangle symbol) toplot the short-run industry supply curve when there are 20 firms.COSTS (Dollars per pound) The following diagram shows the market demand for copper.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 candisregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use thepurple points (diamond symbol) to plot the short-run industry supply curve when there are 15 firms. Finally, use the green points (triangle symbol) toplot the short-run industry supply curve when there are 20 firms.10090Supply (10 firms)807060Supply (15 firms)5040Supply (20 firms)Demand302010125250375500625750875 1000 1125 1250QUANTITY (Thousands of pounds)If there were 20 firms in this market, the short-run equilibrium price of copper would be $per pound. At that price, firms in this industrywouldv . Therefore, in the long run, firms wouldv the copper market.Because you know that competitive firms earnv economic profit in the long run, you know the long-run equilibrium price must beper pound. From the graph, you can see that this means there will bev firms operating in the copper industry in long-runequilibrium.True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns positive accounting profit.O TrueO FalsePRICE (Dollars per pound)

Question

7. Short-run supply and long-run equilibriumConsider the competitive market for copper. 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. The following diagram shows the market demand for copper. 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. If there were 20 firms in this market, the short-run equilibrium price of copper would be ___ per pound. At that price, firms in this industry would (shutdown / earn a positive profit / operate at a loss / earn cero profit ). Therefore, in the long run, firms would (enter / exit / neither) the copper market. Because you know that competitive firms earn (negative / positive / zero) 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 (10/15/20) firms operating in the copper industry in long-run equilibrium. (True or False): Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns positive accounting profit. 7. Short-run supply and long-run equilibriumConsider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical andfaces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph.(?)100908070605040ATC3020AVC10MC O102030405060708090100QUANTITY (Thousands of pounds)The following diagram shows the market demand for copper.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 candisregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use thepurple points (diamond symbol) to plot the short-run industry supply curve when there are 15 firms. Finally, use the green points (triangle symbol) toplot the short-run industry supply curve when there are 20 firms.COSTS (Dollars per pound) The following diagram shows the market demand for copper.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 candisregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use thepurple points (diamond symbol) to plot the short-run industry supply curve when there are 15 firms. Finally, use the green points (triangle symbol) toplot the short-run industry supply curve when there are 20 firms.10090Supply (10 firms)807060Supply (15 firms)5040Supply (20 firms)Demand302010125250375500625750875 1000 1125 1250QUANTITY (Thousands of pounds)If there were 20 firms in this market, the short-run equilibrium price of copper would be $per pound. At that price, firms in this industrywouldv . Therefore, in the long run, firms wouldv the copper market.Because you know that competitive firms earnv economic profit in the long run, you know the long-run equilibrium price must beper pound. From the graph, you can see that this means there will bev firms operating in the copper industry in long-runequilibrium.True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns positive accounting profit.O TrueO FalsePRICE (Dollars per pound)

Accepted Answer

Answered: Image /qna-images/answer/6bca7892-f222-430f-a02a-e809ebaf5fc4.jpg