Homework Help is Here – Start Your Trial Now!
Business
Economics
PRICE (Dollars per pound) 20 10 50 5. Short-run supply and long-run equilibrium Consider the competitive market for ruthenium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. COSTS (Dollars per pound) 60 100 90 40 ATC 20 10 MC AVC 0 0 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pounds) ? 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 20 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 30 firms. 80 100 ° 125 Demand 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) Supply (20 firms) ••• Supply (10 firms) Supply (30 firms) If there were 10 firms in this market, the short-run equilibrium price of ruthenium would be S would Therefore, in the long run, firms would Because you know that competitive firms earn per pound. At that price, firms in this industry the ruthenium market. 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 ruthenium 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 negative accounting profit. True False

PRICE (Dollars per pound) 20 10 50 5. Short-run supply and long-run equilibrium Consider the competitive market for ruthenium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. COSTS (Dollars per pound) 60 100 90 40 ATC 20 10 MC AVC 0 0 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pounds) ? 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 20 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 30 firms. 80 100 ° 125 Demand 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) Supply (20 firms) ••• Supply (10 firms) Supply (30 firms) If there were 10 firms in this market, the short-run equilibrium price of ruthenium would be S would Therefore, in the long run, firms would Because you know that competitive firms earn per pound. At that price, firms in this industry the ruthenium market. 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 ruthenium 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 negative accounting profit. True False

Essentials of Economics (MindTap Course List)
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 11PA: Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + q2...
See similar textbooks
icon
Related questions
Question
None
PRICE (Dollars per pound) 20 10 50 5. Short-run supply and long-run equilibrium Consider the competitive market for ruthenium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. COSTS (Dollars per pound) 60 100 90 40 ATC 20 10 MC AVC 0 0 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pounds) ? 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 20 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 30 firms. 80 100 ° 125 Demand 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) Supply (20 firms) ••• Supply (10 firms) Supply (30 firms) If there were 10 firms in this market, the short-run equilibrium price of ruthenium would be S would Therefore, in the long run, firms would Because you know that competitive firms earn per pound. At that price, firms in this industry the ruthenium market. 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 ruthenium 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 negative accounting profit. True False
Transcribed Image Text:PRICE (Dollars per pound) 20 10 50 5. Short-run supply and long-run equilibrium Consider the competitive market for ruthenium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. COSTS (Dollars per pound) 60 100 90 40 ATC 20 10 MC AVC 0 0 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pounds) ? 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 20 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 30 firms. 80 100 ° 125 Demand 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) Supply (20 firms) ••• Supply (10 firms) Supply (30 firms) If there were 10 firms in this market, the short-run equilibrium price of ruthenium would be S would Therefore, in the long run, firms would Because you know that competitive firms earn per pound. At that price, firms in this industry the ruthenium market. 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 ruthenium 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 negative accounting profit. True False
Expert Solution
steps

Step by step

Solved in 2 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Exploring Economics
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
SEE MORE TEXTBOOKS