5. Short-run equilibrium Consider a perfectly competitive market for wheat in Chicago. There are 120 firms in the industry, each of which has the cost curves shown on the following graph: 100 90 MC 80 70 60 ATC 50 40 30 AVC 20 10 5 10 15 20 25 30 35 40 45 50 OUTPUT (Thousands of bushels) CST (Cents per bushel)

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5. Short-run equilibrium
Consider a perfectly competitive market for wheat in Chicago. There are 120 firms in the industry, each of which has the cost curves shown on the
following graph:
(?
100
90
MC
80
70
60
ATC
50
40
30
AVC
20
10
10
15
20
25
30
35
40
45
50
OUTPUT (Thousands of bushels)
COST (Cents per bushel)
Transcribed Image Text:5. Short-run equilibrium Consider a perfectly competitive market for wheat in Chicago. There are 120 firms in the industry, each of which has the cost curves shown on the following graph: (? 100 90 MC 80 70 60 ATC 50 40 30 AVC 20 10 10 15 20 25 30 35 40 45 50 OUTPUT (Thousands of bushels) COST (Cents per bushel)
100
Demand
90
Supply Curve
80
70
60
Equilibrium
50
30
20
10
600
1200 1800 2400 3000 3600 4200 4800 5400 6000
QUANTITY (Thousands of bushels)
At the current short-run market price, firms will
v in the short run. In the long run,
the market
given the current market price.
PRICE (Cents per bushel)
Transcribed Image Text:100 Demand 90 Supply Curve 80 70 60 Equilibrium 50 30 20 10 600 1200 1800 2400 3000 3600 4200 4800 5400 6000 QUANTITY (Thousands of bushels) At the current short-run market price, firms will v in the short run. In the long run, the market given the current market price. PRICE (Cents per bushel)
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