If there were 20 firms in this market, the short-run equilibrium price of titanium would be $_______ per pound. At that price, firms in this industry would________ (operate at a loss/ shut down/ earn zero profit/ earn a positive profit). Therefore, in the long run, firms would ________ (enter/exit/ neither enter nor exit) the titanium market.Because you know that competitive firms earn ________ (zero/ negative/ positive) 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 ______ (10/ 15/ 20) firms operating in the titanium industry in long-run equilibrium. 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 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.PRICE (Dollars per pound)100908070605040302010Demand00 125 250 375 500 625 750 875 1000 1125 1250QUANTITY (Thousands of pounds)Supply (10 firms)Supply (15 firms)Supply (20 firms)? 7. Short-run supply and long-run equilibriumConsider the competitive market for titanium. Assume that, regardless of how many firms are in the industry, every firm in the industry is identicaland faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph.COSTS (Dollars per pound)10090807060504030201000MCATCAVCDD8010 20 30 40 50 60 70QUANTITY (Thousands of pounds)90 100?

Demand refers to the quantity of a particular good or service that consumers are willing and able to…

Answered: The following diagram shows the market…

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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If there were 20 firms in this market, the short-run equilibrium price of titanium would be $_______ per pound. At that price, firms in this industry would________ (operate at a loss/ shut down/ earn zero profit/ earn a positive profit). Therefore, in the long run, firms would ________ (enter/exit/ neither enter nor exit) the titanium market.

Because you know that competitive firms earn ________ (zero/ negative/ positive) 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 ______ (10/ 15/ 20) firms operating in the titanium industry in long-run equilibrium.

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 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 15 firms. Finally, use the green points (triangle symbol) to
plot the short-run industry supply curve when there are 20 firms.
PRICE (Dollars per pound)
100
90
80
70
60
50
40
30
20
10
Demand
0
0 125 250 375 500 625 750 875 1000 1125 1250
QUANTITY (Thousands of pounds)
Supply (10 firms)
Supply (15 firms)
Supply (20 firms)
?

7. Short-run supply and long-run equilibrium
Consider the 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.
COSTS (Dollars per pound)
100
90
80
70
60
50
40
30
20
10
0
0
MC
ATC
AVC
D
D
80
10 20 30 40 50 60 70
QUANTITY (Thousands of pounds)
90 100
?

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