11 The average cost (SR and LR) of Q = 50,000 is $10. / 5o,000,10) Ac SRE LR (s0,000, 1a) %3D With the current plant size, the minimum of short run average cost (SRAC) is $8, at uie output level of Q = 62,000. (62.000, 8) SRAC a. Sketch the firm's LRAC, SRAC, SRMC, and LRMC curves. %3D b. Assume that the market price in the short run is P = $11. Given the way you drew the diagram, identify the short run equilibrium quantity (Qs1) in the graph. C. Next, assume that the price of $11 persists long enough for the firm to make any profitable long run adjustment to plant size. Identify equilibrium quantity (Qs2). d. Finally, assume that the market attains long run equilibrium. Given the way you drew the graph, identify this firm's equilibrium quantity (Q*) in the diagram.
11 The average cost (SR and LR) of Q = 50,000 is $10. / 5o,000,10) Ac SRE LR (s0,000, 1a) %3D With the current plant size, the minimum of short run average cost (SRAC) is $8, at uie output level of Q = 62,000. (62.000, 8) SRAC a. Sketch the firm's LRAC, SRAC, SRMC, and LRMC curves. %3D b. Assume that the market price in the short run is P = $11. Given the way you drew the diagram, identify the short run equilibrium quantity (Qs1) in the graph. C. Next, assume that the price of $11 persists long enough for the firm to make any profitable long run adjustment to plant size. Identify equilibrium quantity (Qs2). d. Finally, assume that the market attains long run equilibrium. Given the way you drew the graph, identify this firm's equilibrium quantity (Q*) in the diagram.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Could I have help figuring out part b-d
Transcribed Image Text:100
IS AC=TC/Q= G0>140
11. Envelope Curve I R00 =0-7.
Hazel's Hazelnuts sells in a perfectly competitive industry.
The firm's minimum long run average cost (LRAC) occurs at output of Q = 100,000.
%3D
The firm is currently operating with a smaller plant size-the size that achieves the
minimum long run average cost of producing 50,000 units.
Transcribed Image Text:LRAC f100:000, ? )
3
The average cost (SR and LR) of Q = 50,000 is $10. / 5o,00010) Ac
11
SR E LR
With the current plant size, the minimum of short run average cost (SRAC) is $8, at uie
output level of Q = 62,000.
(62.000, 8) SRAC
a. Sketch the firm's LRAC, SRAC, SRMC, and LRMC curves.
b. Assume that the market price in the short run is P = $11. Given the way you drew
the diagram, identify the short run equilibrium quantity (Qs1) in the graph.
C. Next, assume that the price of $11 persists long enough for the firm to make any
profitable long run adjustment to plant size. Identify equilibrium quantity (Qs2).
d. Finally, assume that the market attains long run equilibrium. Given the way you drew
the graph, identify this firm's equilibrium quantity (Q*) in the diagram.
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13
SRAC LRMC
SR
12
10
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