- 2காய Agend weight and is fugiado su angefa ser una buo ang us Agentur in un bugevado say and to see and are se poder fernsey je to azud umuqnba the ruthenium market. per pound. At that price, firms in this i se si te da vas ne bo pod jad [ unu-Subj auQ Mzux mok; “unu Suவு சுபு] பy 2பூud அயமைலை Therefore, in the long run, firms would (wy oz) Addins (91) Addins $24 Supply (10 firms) O Fals True Jag pinos whiwaigi jo pod white - in to see what it means t D accounting profit. Because you know that competitive firms cam QUANTITY (Thousands of pounds) equilibrium. Demand industry would D 0 6 19 H 888 PRICE (Dollars per pod H 88

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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PRICE (Dollars per pod
100
80
0
Demand
equilibrium.
125 250 ITS 500
7:50 875 1000
QUANTITY (Thousands of pounds)
Because you know that competitive firms earn
-0-
Supply (10 firms)
If there were 10 firms in this market, the short-run equilibrium price of ruthenium would be s
industry would
. Therefore, in the long run, firms would
O True
O False
Supply (15 firms)
Supply (20 firms)
per pound. From the graph, you can see that this means there will be
per pound. At that price, firms in this
the ruthenium market.
economic profit in the long run, you know the long-run equilibrium price must
firms operating in the ruthenium industry in long-run
True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative
accounting profit.
Transcribed Image Text:PRICE (Dollars per pod 100 80 0 Demand equilibrium. 125 250 ITS 500 7:50 875 1000 QUANTITY (Thousands of pounds) Because you know that competitive firms earn -0- Supply (10 firms) If there were 10 firms in this market, the short-run equilibrium price of ruthenium would be s industry would . Therefore, in the long run, firms would O True O False Supply (15 firms) Supply (20 firms) per pound. From the graph, you can see that this means there will be per pound. At that price, firms in this the ruthenium market. economic profit in the long run, you know the long-run equilibrium price must firms operating in the ruthenium industry in long-run True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit.
7. 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 point)
8
100
20
80
20
0
a
MC
10
ATC
AVC
O
□
20 30
50
80 TO
QUANTITY (Thousands of pounds)
20 100
The following graph plots the market demand curve for ruthenium.
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.
Transcribed Image Text:7. 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 point) 8 100 20 80 20 0 a MC 10 ATC AVC O □ 20 30 50 80 TO QUANTITY (Thousands of pounds) 20 100 The following graph plots the market demand curve for ruthenium. 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.
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