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)Demand302010+123250373500623750873100011231250QUANTITY (Thousands of pounds)If there were 30 firms in this market, the short-run equilibrium price of titanium would be $per pound. At that price, firms in this industrywouldTherefore, in the long run, firms wouldthe titanium market.Because you know that perfectly competitive firms earneconomic profit in the long run, you know the long-run equilibrium price mustbe $per pound. From the graph, you can see that this means there will befirms operating in the titanium industry in long-runequilibrium.PRICE (Dollars per pound) 6. Short-run supply and long-run equilibriumConsider the perfectly competitive market for titanium. 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.(?100908070605040ATC3020AVC10MCO++++0 5101520253035404550QUANTITY (Thousands of pounds)The following diagram shows the market demand for titanium.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.COSTS (Dollars per pound)

The short-run individual curve of supply is the marginal cost of an individual firm is marginal cost…

Consider the perfectly competitive market for titanium. 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 perfectly competitive market for titanium. 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.

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 8PA

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