Homework Help is Here – Start Your Trial Now!
Business
Economics
7. Short-run supply and long-run equilibrium Consider the competitive market for ruthenlum. 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. (puno je su PRICE (Dollars per pound) pune de 100 90 80 70 60 50 30 100 10 90 0 10 0 The following graph plots the market demand curve for ruthenlum. 0 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. MC 5 ATC AVC D D 10 15 20 30 35 40 QUANTITY (Thousands of pounds) Demand 45 50 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) -0 Supply (10 firms) • Supply (20 firms) Supply (30 firms) (?) If there were 10 firms in this market, the short-run equilibrium price of ruthenium would be S would ▼. Therefore, in the long run, firms would per pound. At that price, firms in this industry the ruthenium market. Because you know that competitive firms earn economic profit in the long run, you know the long-run equilibrium price must be Sper pound. From the graph, you can see that this means there will be firms operating in the ruthenium 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 negative accounting profit. O True O False

7. Short-run supply and long-run equilibrium Consider the competitive market for ruthenlum. 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. (puno je su PRICE (Dollars per pound) pune de 100 90 80 70 60 50 30 100 10 90 0 10 0 The following graph plots the market demand curve for ruthenlum. 0 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. MC 5 ATC AVC D D 10 15 20 30 35 40 QUANTITY (Thousands of pounds) Demand 45 50 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) -0 Supply (10 firms) • Supply (20 firms) Supply (30 firms) (?) If there were 10 firms in this market, the short-run equilibrium price of ruthenium would be S would ▼. Therefore, in the long run, firms would per pound. At that price, firms in this industry the ruthenium market. Because you know that competitive firms earn economic profit in the long run, you know the long-run equilibrium price must be Sper pound. From the graph, you can see that this means there will be firms operating in the ruthenium 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 negative accounting profit. O True O False

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
Problem 10PA
See similar textbooks
icon
Related questions
Question

No written by hand solution

 

7. Short-run supply and long-run equilibrium Consider the competitive market for ruthenium. 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. 90 80 70 0 60 V 50 40 0 ATC 30 20 AVC MC COSTS (Dollars per pound) PRICE (Dollars per pound) 100 90 80 70 The following graph plots the market demand curve for ruthenlum. 60 50 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. 40 30 20 100 10 10 0 0 0 5 10 15 20 25 30 35 40 QUANTITY (Thousands of pounds) 45 50 Demand 0 125 250 375 500 625 625 750 750 875 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 ruthenium would be S would Therefore, in the long run, firms would Because you know that competitive firms earn $ per pound. From the graph, you can see that this means there will be equilibrium. per pound. At that price, firms in this industry the ruthenium market. economic profit in the long run, you know the long-run equilibrium price must be firms operating in the ruthenium 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 O False
Transcribed Image Text:7. Short-run supply and long-run equilibrium Consider the competitive market for ruthenium. 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. 90 80 70 0 60 V 50 40 0 ATC 30 20 AVC MC COSTS (Dollars per pound) PRICE (Dollars per pound) 100 90 80 70 The following graph plots the market demand curve for ruthenlum. 60 50 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. 40 30 20 100 10 10 0 0 0 5 10 15 20 25 30 35 40 QUANTITY (Thousands of pounds) 45 50 Demand 0 125 250 375 500 625 625 750 750 875 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 ruthenium would be S would Therefore, in the long run, firms would Because you know that competitive firms earn $ per pound. From the graph, you can see that this means there will be equilibrium. per pound. At that price, firms in this industry the ruthenium market. economic profit in the long run, you know the long-run equilibrium price must be firms operating in the ruthenium 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 O False
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Short-run Supply Curve
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics 2e
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS