If there were 10 firms in this market, the short-run equilibrium price of steel would be $___ per tonne.At that price, firms in this industry would [(A) earn a positive profit (B) earn a zero profit (C) operate at a loss (D)shut down]. Therefore, in the long run, firms would _____ the steel market.2) Because you know that competitive firms earn ____ economic profit in the long run, you know the long-run equilibrium price must be $ ____ per tonne. From the graph, you can see that this means there will be ___ firms operating in the steel industry in long-run equilibrium.3) True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit. A) True B) False The following diagram shows the market demand for steel.On the graph below, 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.PRICE (Dollars per tonne)10090807060504030201000125Demand250 375 500 625 750 875 1000 1125 1250QUANTITY (Thousands of tonnes)Supply (10 firms)Supply (15 firms)Supply (20 firms)? Consider the competitive market for steel. 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.COSTS (Dollars per tonne)1009080706050403020100MC0 10ATCAVC20 30 40 50 60 70QUANTITY (Thousands of tonnes)8090100(?)

Perfect competition is a market condition where there is a large number of buyers and sellers…

Answered: Consider the competitive market for…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter21: Production And Costs

Section: Chapter Questions

Problem 16QP

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If there were 10 firms in this market, the short-run equilibrium price of steel would be $___ per tonne.

At that price, firms in this industry would [(A) earn a positive profit (B) earn a zero profit (C) operate at a loss (D)shut down]. Therefore, in the long run, firms would _____ the steel market.

2) Because you know that competitive firms earn ____ economic profit in the long run, you know the long-run equilibrium price must be $ ____ per tonne. From the graph, you can see that this means there will be ___ firms operating in the steel industry in long-run equilibrium.

3) True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit.

A) True
B) False

The following diagram shows the market demand for steel.
On the graph below, 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.
PRICE (Dollars per tonne)
100
90
80
70
60
50
40
30
20
10
0
0
125
Demand
250 375 500 625 750 875 1000 1125 1250
QUANTITY (Thousands of tonnes)
Supply (10 firms)
Supply (15 firms)
Supply (20 firms)
?

Consider the competitive market for steel. 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.
COSTS (Dollars per tonne)
100
90
80
70
60
50
40
30
20
10
0
MC
0 10
ATC
AVC
20 30 40 50 60 70
QUANTITY (Thousands of tonnes)
80
90
100
(?)

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