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Consider a perfectly competitive market for wheat in San Diego. There are 80 firms in the industry, each of which has the cost curves shown on the following graph: 100 90 MC 80 70 60 ATC bushel)

Consider a perfectly competitive market for wheat in San Diego. There are 80 firms in the industry, each of which has the cost curves shown on the following graph: 100 90 MC 80 70 60 ATC bushel)

Survey Of Economics
Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter7: Perefect Competition
Section: Chapter Questions
Problem 10SQP
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Consider a perfectly competitive market for wheat in San Diego. There are 80 firms in the industry, each of which has the cost curves shown on the following graph: 100 90 MC 80 70 60 ATC 40 30 AVC 20 10 5 10 15 20 25 30 35 40 45 50 QUANTITY OF OUTPUT (Thousands of bushels) COST (Cents per bushel)
Transcribed Image Text:Consider a perfectly competitive market for wheat in San Diego. There are 80 firms in the industry, each of which has the cost curves shown on the following graph: 100 90 MC 80 70 60 ATC 40 30 AVC 20 10 5 10 15 20 25 30 35 40 45 50 QUANTITY OF OUTPUT (Thousands of bushels) COST (Cents per bushel)
The following graph shows the market demand for wheat. Use the orange points (square symbol) to plot the short-run industry supply curve for the wheat industry. Specifically, place an orange point at the lowest point of the supply curve and another orange point at the highest point of the supply curve. (Note: 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. Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.) Then, place the black point (plus symbol) on the graph to indicate the short-run equilibrium price and quantity in this market. (Note: Dashed drop lines will automatically extend to both axes.) 100 Demand 90 Supply Curve 80 70 60 Equilibrium 50 40 30 20 + 10 400 800 1200 1600 2000 2400 2800 3200 3600 4000 QUANTITY OF OUTPUT (Thousands of bushels) At the current short-run market price, firms will in the short run. In the long run, the market given the current market price. PRICE (Cents perbushel)
Transcribed Image Text:The following graph shows the market demand for wheat. Use the orange points (square symbol) to plot the short-run industry supply curve for the wheat industry. Specifically, place an orange point at the lowest point of the supply curve and another orange point at the highest point of the supply curve. (Note: 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. Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.) Then, place the black point (plus symbol) on the graph to indicate the short-run equilibrium price and quantity in this market. (Note: Dashed drop lines will automatically extend to both axes.) 100 Demand 90 Supply Curve 80 70 60 Equilibrium 50 40 30 20 + 10 400 800 1200 1600 2000 2400 2800 3200 3600 4000 QUANTITY OF OUTPUT (Thousands of bushels) At the current short-run market price, firms will in the short run. In the long run, the market given the current market price. PRICE (Cents perbushel)
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