If there were 30 firms in this market, the short-run equilibrium price of copper would be______ per pound. At that price, firms in this industry would . Therefore, in the long run, firms would _______ the copper 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 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. True False 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 20 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 30 firms. Finally, use the green points (triangle symbol) toplot the short-run industry supply curve when there are 40 firms.10090Supply (20 firms)807060Supply (30 firms)5040Supply (40 firms)Demand3020101252503755006257508751000 1125 1250QUANTITY (Thousands of pounds)PRICE (Dollars per pound) 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.100908070605040АТС3020AVC10MC O101520253035404550QUANTITY (Thousands of pounds)COSTS (Dollars per pound)

From the given information, we can create a table as follows:

Consider 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.

Consider 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.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 31P: Return to Figure 9.2. Suppose P0 is 10 and P1 is 11. Suppose a new firm with the same LRAC curve as...

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Question

If there were 30 firms in this market, the short-run equilibrium price of copper would be______ per pound. At that price, firms in this industry would . Therefore, in the long run, firms would _______ the copper 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 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.

True

False

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 20 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 30 firms. Finally, use the green points (triangle symbol) to
plot the short-run industry supply curve when there are 40 firms.
100
90
Supply (20 firms)
80
70
60
Supply (30 firms)
50
40
Supply (40 firms)
Demand
30
20
10
125
250
375
500
625
750
875
1000 1125 1250
QUANTITY (Thousands of pounds)
PRICE (Dollars per pound)

7. Short-run supply and long-run equilibrium
Consider 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.
100
90
80
70
60
50
40
АТС
30
20
AVC
10
MC O
10
15
20
25
30
35
40
45
50
QUANTITY (Thousands of pounds)
COSTS (Dollars per pound)

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