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 ____________ . Therefore, in the long run, firms would ____________ the copper market. Because you know that perfectly 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: Each of the firms operating in this industry in the long run earns negative accounting profit. Use the orange points (square symbol) to plot the short-run industry supply curve when there are 20 firms in the market. (Hint: You can disregardthe 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 poin(diamond symbol) to plot the short-run industry supply curve when there are 30 firms. Finally, use the green points (triangle symbol) to plot theshort-run industry supply curve when there are 40 firms.(?10090Supply (20 firms)807060Supply (30 firms)5040Supply (40 firms)Demand3020101232503735006237508731000 11231250QUANTITY OF OUTPUT (Thousands of pounds)PRICE (Dollars per pound) Consider the perfectly competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry isidentical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph.100908070605040АТС3020AVC10MC O101520253035404550QUANTITY OF OUTPUT (Thousands of pounds)COSTS (Dollars per pound)

In the model of perfect competition, we assume that a firm determines its output by finding the…

Answered: If there were 20 firms in this market,…

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Perefect Competition

Section: Chapter Questions

Problem 5SQP

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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 ____________ . Therefore, in the long run, firms would ____________ the copper market.

Because you know that perfectly 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: Each of the firms operating in this industry in the long run earns negative accounting profit.

Use the orange points (square symbol) to plot the 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 poin
(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
123
250
373
500
623
750
873
1000 1123
1250
QUANTITY OF OUTPUT (Thousands of pounds)
PRICE (Dollars per pound)

Consider the perfectly 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 OF OUTPUT (Thousands of pounds)
COSTS (Dollars per pound)

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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