Consider a perfectly competitive market for wheat in San Diego. There are 80 firms in the industry, each of which has the cost curves shown on thefollowing graph:10090MC807060ATC4030AVC20105101520253035404550QUANTITY OF OUTPUT (Thousands of bushels)COST (Cents per bushel) The following graph shows the market demand for wheat.Use the orange points (square symbol) to plot the short-run industry supply curve for the wheat industry. Specifically, place an orange point at thelowest point of the supply curve and another orange point at the highest point of the supply curve. (Note: You can disregard the portion of the supplycurve that corresponds to prices where there is no output, since this is the industry supply curve. Plot your points in the order in which you would likethem connected. Line segments will connect the points automatically.) Then, place the black point (plus symbol) on the graph to indicate the short-runequilibrium price and quantity in this market. (Note: Dashed drop lines will automatically extend to both axes.)100Demand90Supply Curve807060Equilibrium50403020 +104008001200 1600 2000 2400 2800 3200 3600 4000QUANTITY OF OUTPUT (Thousands of bushels)At the current short-run market price, firms willin the short run. In the long run,the marketgiven the current market price.PRICE (Cents perbushel)

No of firms in the industry = 80 Supply curve of each firm starts with minimum AVC and is equal to…

Answered: Consider a perfectly competitive market…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider a perfectly competitive market for wheat in San Diego. There are 80 firms in the industry, each of which has the cost curves shown on the following graph: 100 90 MC 80 70 60 ATC bushel)