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 20 firms. Finally, use the green points (triangle symbol) toplot the short-run industry supply curve when there are 30 firms.PRICE (Dollars per pound)807264564840322416800 120 240 360 480 600 720 840 960 1080 1200QUANTITY (Thousands of pounds)Because you know that competitive firms earn$DemandSupply (10 firms)TrueSupply (20 firms)If there were 20 firms in this market, the short-run equilibrium price of rhenium would be $wouldTherefore, in the long run, firms wouldO FalseSupply (30 firms)per pound. From the graph, you can see that this means there will be?per 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. 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)8072645648403224168004MCATCAVC08 12 16 20 24 28 32 36QUANTITY (Thousands of pounds)The following graph plots the market demand curve for rhenium.40?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 20 firms. Finally, use the green points (triangle symbol) toplot the short-run industry supply curve when there are 30 firms.

Supply curve is the curve that denotes the different levels of quantity that a producer is willing…

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) 80 72 64 56 48 40 32 24 16 8 0 MC ATC AVC 0 ☐ 048 12 16 20 24 28 32 36 40 QUANTITY (Thousands of pounds) The following graph plots the market demand curve for rhenium. ? 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.

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) 80 72 64 56 48 40 32 24 16 8 0 MC ATC AVC 0 ☐ 048 12 16 20 24 28 32 36 40 QUANTITY (Thousands of pounds) The following graph plots the market demand curve for rhenium. ? 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.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. Consider a market with 90 firms, each firm has a short-run total cost function as follows: TC(q) = 5q², and a marginal cost function: MC(q) = 10q. Market demand is given by equation Qº(p) = 200 - p. %3D a. What is the fixed cost? Solve the average variable cost function in the short-run. b. What is the supply function of each firm? short-run equilibrium outcome: P*, Q* and q*.
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…
53 ces Suppose an industry consists of 150 firms with identical cost structures (represented by the "typical individual firm" in the figure below). The price is $18. Price/Cost $60 $50 $40 $30 $20 $10 0 10 20 30 MC Quantity 40 ATC AVC 50 60 Instructions: Enter your answers as a whole number. a. The firm output quantity at the equilibrium price is: b. The market output quantity at the equilibrium price is: units. units. Save & Exit Submit
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 60 40 20 10 + 0 + 0 MC + 5 ATC AVC D 0 10 15 20 25 30 35 QUANTITY (Thousands of pounds) 40 + 45 50 ?
Consider the perfectly 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 ( MCMC ), average total cost ( ATCATC ), and average variable cost ( AVCAVC ) curves shown on the following graph
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
6. Deriving the short-run supply curve The following graph plots the marginal cost (MC) curve, average total cost (ATC) curve, and average variable cost (AVC) curve for a firm operating in the competitive market for sun lamps. COSTS (Dollars) 100 20 80 TO 0 □ 5 D MC-D Price (Dollars per lamp) 10 20 32 40 50 60 ATC AVC Quantity (Lamps) DO 15 QUANTITY (Thousands of lamps) 50 For every price level given in the following table, use the graph to determine the profit-maximizing quantity of lamps for the firm. Further, select whether the firm will choose to produce, shut down, or be indifferent between the two in the short run. (Assume that when price exactly equals average variable cost, the firm is indifferent between producing zero lamps and the profit-maximizing quantity of lamps.) Lastly, determine whether the firm will earn a profit, incur a loss, or break even at each price. ? Produce or Shut Down? Profit or Loss?
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. What is ATC per unit for each level of output listed in the table? Instructions: Round your answers to 2 decimal places. Output TC MC ATC 25,000 100,000 $ 0.50 50,000 150,000 1.00 75,000 187,500 2.50 100,000 275,500 3.00 Is this a decreasing-cost industry? (Click to select) Suppose that the market price for a bottle of vitamins is $2.5 and that at that price the total market quantity demanded is 75,000,000 bottles. How many firms will there be in this industry? firm(s). Suppose that, instead, the market quantity demanded at a price of $2.5 is only 75,000. How many firms do you expect there to be in this industry? ) firm(s). Review your answers to parts b, c, and d. Does the level of demand determine this industry's market…
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…
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