7. Short-run supply and long-run equilibriumConsider the competitive market for rhenium. Assume that no matter how many firms operate in the industry, every firm is identical and faces thesame marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph.COSTS (Dollars per pound)1009080706050403020100MCATCAVC0 10 20 30 40 50 60 70 80QUANTITY (Thousands of pounds)90The following graph plots the market demand curve for rhenium.100? 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)100908070605040201000125 250 375 500 625 750 875 1000 1125 1250QUANTITY (Thousands of pounds)DemandBecause you know that competitive firms earn$Supply (10 firms)TrueSupply (15 firms)If there were 10 firms in this market, the short-run equilibrium price of rhenium would be $would. Therefore, in the long run, firms wouldO False◄Supply (20 firms)per pound. From the graph, you can see that this means there will beper pound. At that price, firms in this industrythe rhenium market.economic profit in the long run, you know the long-run equilibrium price must befirms operating in the rhenium industry in long-run equilibrium.True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit.

Economic costs involve not just the accounting costs but also the opportunity cost of making one…

7. Short-run supply and long-run equilibrium Consider the competitive market for rhenium. 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 pound) 100 90 80 70 30 20 10 0 MC 0 10 ATC AVC ☐ ■ 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of pounds) The following graph plots the market demand curve for rhenium. ?

7. Short-run supply and long-run equilibrium Consider the competitive market for rhenium. 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 pound) 100 90 80 70 30 20 10 0 MC 0 10 ATC AVC ☐ ■ 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of pounds) The following graph plots the market demand curve for rhenium. ?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

7. Short-run supply and long-run equilibrium Consider the competitive market for steel. 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. 100 90 80 COSTS (Dollars per ton) 888 50 60 70 70 40 ATC 30 20 80 10 MC AVC D 0 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of tons)
COSTS AND REVENUE (Dollars per cardigan) 5 15 20 Suppose Iyana operates a handicraft pop-up retail shop that sells cardigans. Assume a perfectly competitive market structure for cardigans with a market price equal to $20 per cardigan. The following graph shows Iyana's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for cardigans for quantities zero through seven (including zero and seven) that Iyana produces. 200 175 150 Total Cost 125 100 TOTAL COST AND REVENUE (Dollars) 75 50 -25 2 6 7 8 QUANTITY (Cardigans) Profit Total Revenue ཟླ༔』 ཝཱ Calculate Iyana's marginal revenue and marginal cost for the first seven cardigans they produce, and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. 35 ° 2 5 6 7 8 QUANTITY (Cardigans) Marginal Revenue -0- Marginal Cost Iyana's profit is maximized…
2
Homework (Ch 14) 7. Short-run supply and long-run equilibrium Consider the competitive market for rhenlum. 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 pound) 100 8 2 283 282 2 70 30 20 0 0 MC-D 10 ATC AVC 30 40 50 60 10 QUANTITY (Thousands of pounds) 80 90 100
A firm in a purely competitive industry is currently producing 1,000 units per day at a total cost of $450. If the firm produced 800 units per day, its total cost would be $300, and if it produced 500 units per day, its total cost would be $275. What are the firm’s ATC per unit at these three levels of production? If every firm in this industry has the same cost structure, is the industry in long-run competitive equilibrium? From what you know about these firms’ cost structures, what is the highest possible price per unit that could exist as the market price in long-run equilibrium? If that price ends up being the market price and if the normal rate of profit is 10 percent, then how big will each firm’s accounting profit per unit be?
11. Problems and Applications Q11 Suppose that each firm in a competitive industry has the following costs: Total Cost: TC = 50 + q? Marginal Cost: MC = q where q is an individual firm's quantity produced. The market demand curve for this product is: Demand Qp = 120 – P where P is the price and Q is the total quantity of the good. Each firm's fixed cost is $ What is each firm's variable cost? 50 + 9
Assume that the most efficient production technology available for making vitamin pills has the cost structure given in the following table. Note that output is measured as the number of bottles of vitamins produced per day and that costs include a normal profit. Output TC MC ATC 50,800 $170,000 $0.60 100,800 220,000 1.10 150,800 257,500 1.71 200,800 365,500 2.45 Instructions: Enter your answers rounded to two decimal places. a. What is ATC per unit for each level of output listed in the table? Enter your answers in the table above. b. Are there economies of scale in production? Yes c. Suppose that the market price for a bottle of vitamins is $1.71. At that price the total market quantity demanded is 301,600,000 bottles. How many firms will be in this industry? firm(s) d. Suppose that, instead, the market quantity demanded at a price of $1.71 is only 150,800. How many firms will be in this industry? firm(s) e. Review your answers to parts b, c, and d. Does the level of demand determine…
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…
7. Short-run supply and long-run equilibrium Consider the competitive market for copper. 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.
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 20 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 30 firms. PRICE (Dollars per pound) 80 72 64 56 48 40 32 24 16 8 0 0 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Thousands of pounds) Because you know that competitive firms earn $ Demand Supply (10 firms) True Supply (20 firms) If there were 20 firms in this market, the short-run equilibrium price of rhenium would be $ would Therefore, in the long run, firms would O False Supply (30 firms) per pound. From the graph, you can see that this means there will be ? per pound. At that price,…
Concept Question 2.11 Question Help ▼ Suppose that a perfectly competitive firm faces a market price of $5 per unit, and at this price the upward-sloping portion of the firm's marginal cost curve crosses its marginal revenue curve at an output level of 1,500 units. If the firm produces 1,500 units, its average variable costs equal $5.50 per unit, and its average fixed costs equal $0.50 per unit. What is the firm's profit-maximizing (or loss-minimizing) output level? (Enter your response as a whole number – include the minus sign if necessary.)
6. Short-run supply and long-run equilibrium Consider the perfectly competitive market for steel. 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. (?) 80 72 64 56 ATC 48 40 32 24 18 AVC 8 MC O 12 15 18 21 24 27 30 QUANTITY (Thousands of tons) COSTS (Dollars per ton) 3.