Assume that all firms in this industry have identical cost curves, and that the market is perfectly competitive. Entire Market S1 S2 17/1 20 15 10 D Price ($/gallon) 30 25 20 15-- 10 5 0 0 2 4 6 8 10 12 Q (thousands of gallons/week) Multiple Choice O Price ($/gallon) 30 It will shift to S2. 25 5 0 Representative Firm MC ATC VC If the market supply curve is given by S3, then what will happen to the market supply curve in the long run? 0 1 2 3 4 5 6 Q (hundreds of gallons/week) It will stay at S3, but the quantity supplied will increase.

Assume that all firms in this industry have identical cost curves, and that the market is perfectly competitive. Entire Market S1 S2 17/1 20 15 10 D Price ($/gallon) 30 25 20 15-- 10 5 0 0 2 4 6 8 10 12 Q (thousands of gallons/week) Multiple Choice O Price ($/gallon) 30 It will shift to S2. 25 5 0 Representative Firm MC ATC VC If the market supply curve is given by S3, then what will happen to the market supply curve in the long run? 0 1 2 3 4 5 6 Q (hundreds of gallons/week) It will stay at S3, but the quantity supplied will increase.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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