Answered: Suppose there are 8 firms in this…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Suppose there are 8 firms in this industry, each of which has the cost curves previously shown.

On the following graph, use the orange points (square symbol) to plot points along the portion of the industry’s short-run supply curve that corresponds to prices where there is positive output.

At the current short-run market price, firms will ___________________ in the short run. In the long run, _______________

COSTS (Dollars)
100
90
80
70
60
50
40
30
20
10
0
0 5
MC
ATC
U
□
AVC
10 15 20 25 30 35 40
QUANTITY (Thousands of lamps)
□
45
50
?

PRICE (Dollars per lamp)
100
90
80
70
60
50
40
30
20
10
0
Demand
40
80 120 160 200 240 280 320 360 400
QUANTITY (Thousands of lamps)
Industry's Short-Run Supply
Equilibrium
?

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