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 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 15 firms. Finally, use the green points (triangle symbol) toplot the short-run industry supply curve when there are 20 firms.(?)1008050882 8 8 89070PRICE (Dollars per pound)40Demand302010中Supply (10 firms)Supply (15 firms)Supply (20 firms)125250 375 500 625 750 875 1000 1125 1250QUANTITY (Thousands of pounds)enterexitneither enter nor exitIf there were 20 firms in this market, the short-run equilibrium price of coppwould operate at a loss. Therefore, in the long run, firms woulder pound. At that price, firms in this industryexitthe copper market.Because you know that competitive firms earneconomic profit in the long run, you know the long-run equilibrium price must beper pound. From the graph, you can see that this means there will be firms operating in the copper industry in long-run equilibrium.

From the graph(green line), it is observed that if there were 20 firms in the market, the…

Answered: Use the orange points (square symbol)…

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 5PA

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Similar questions

Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the firm not simply increase its profits by selling an extremely high quantity?
Briefly explain the reason for the shape of a marginal revenue curve for a perfectly competitive firm.
Assume that the gold-mining industry is perfectly competitive. a) Illustrate a long-run equilibrium using diagrams for the gold market and for a representative gold mine. b) Suppose that an increase in jewelry demand induces a surge in the demand for gold. Using your diagrams, show what happens in the short run to the gold market and to each existing gold mine. c) If the demand for gold remains high, what would happen to the price over time? Specifically, would the new long-run equilibrium price be above, below, or equal to the short-run equilibrium price in part b)? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Suppose that the price of corn, a crop produced in a perfectly (or purely) competitive industry, increased 208% last year as demand for corn‑based ethanol fuel increased. What do you expect to happen in the long run for the corn industry given this recent success? A. The price per bushel of corn will continue to increase, yielding higher profits. Thus, more firms will enter the market indefinitely. B. Profits will become negative due to overfarming, which will result in the corn farming industry going under. C. Profits will be equal to zero. D. None of the above. Suppose the firms in the market for bacon, also a perfectly (or purely) competitive industry, experienced losses last quarter due to people becoming increasingly concerned about how high-fat diets negatively impact health. What do you expect to happen in the long run for the bacon industry? A. Seeing this as an opportunity to monopolize a fledging industry, firms will enter the industry, shifting…
Answer the following, providing a graphical illustration along with your answer where necessary:a) What is the profit maximising condition in a market with perfect competition?b) Explain what is meant by abnormal profit? What is the adjustment process from short-runabnormal profit to long-run equilibrium in a perfectly competitive market?c) Please find below Pricing options for firm A and B, along with individual payoffs (Firm A’spayoff/Firm B’s payoff)Firm BFirm APrice £2 Price £1Price £2 £20,000/£20,000 £10,000/£24,000Price £1 £24,000/£10,000 £12,000/£12,000Assume you are the pricing manager at Firm A;i) What is your payoff for a ‘maximin’ strategy?ii) What is your payoff for a ‘maximax’ strategy?iii) Does a dominant strategy exist within this prisoners’ dilemma? QUESTION A AND B ALREADY SOLVED, FROM C ONLY !!!
Answer the following, providing a graphical illustration along with your answer where necessary:a) What is the profit maximising condition in a market with perfect competition?b) Explain what is meant by abnormal profit? What is the adjustment process from short-runabnormal profit to long-run equilibrium in a perfectly competitive market?c) Please find below Pricing options for firm A and B, along with individual payoffs (Firm A’spayoff/Firm B’s payoff)Firm BFirm APrice £2 Price £1Price £2 £20,000/£20,000 £10,000/£24,000Price £1 £24,000/£10,000 £12,000/£12,000Assume you are the pricing manager at Firm A;i) What is your payoff for a ‘maximin’ strategy?ii) What is your payoff for a ‘maximax’ strategy?iii) Does a dominant strategy exist within this prisoners’ dilemma?
Assume that there are 100 identical company in the perfectly competitive cabbage industry. Each firmhas a short-run total cost curve given by ST C = 0.5Q2 − 10Q + 300. Solve the following: 1. Derive expressions for the corresponding short-run average cost, average variable cost,average fixed cost curve, and marginal cost.2. Calcalute the firm’s short-run supply curve with market price (P) as a function of Q (thenumber of kilos of cabbage)3. Show the industry supply curve for the 50 firms in this industry
Suppose that each firm in a competitive industry has the following costs: Total cost: TC = 50 + 0.5Q^2The market demand curve for this product is: Qd= 120 −PThere are 9 firms in the market.a) What are each firm’s: fixed cost, variable cost, marginal cost, and average total cost? Graph the average-total-cost curve and the marginal-cost curve.b) Give the equation for each firm’s supply curve.the average-total-cost curve at its minimum? What is marginal cost and average totalc) Give the equation for the market supply curve for the short run in which the numbercost at that quantity?
Fill in the following table for a firm in a perfectly competitive industry. Quantity Price TR TC Profit ATC MR MC 5 $100 $500 $300 6 $100 $330 $100 $30 7 $100 $420 8 $100 $520 9 $100 $630 What is the highest profit possible? What is the profit maximizing price? What is the profit maximizing level of output? (Pick one if there are multiple levels of output with the same profit.) What is the average total cost at profit maximization? (Use the same Q you used in c.) What is the profit per unit at profit maximization? How you do know that this is a table for a perfectly competitive firm? In the table above, if you only had the columns Quantity, MR, and MC, explain how you still be able to find the profit-maximizing level of output.

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