Consider the competitive market for rhodium. 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) s per pound) 80 72 64 56 80 48 72 40 64 56 48 40 32 24 16 8 0 0 3 MC ATC Demand The following graph plots the market demand curve for rhodium. D AVC 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. D D 6 9 12 15 18 21 QUANTITY (Thousands of pounds) 24 27 30 -0- Supply (10 firms) Supply (20 firms)

Consider the competitive market for rhodium. 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) s per pound) 80 72 64 56 80 48 72 40 64 56 48 40 32 24 16 8 0 0 3 MC ATC Demand The following graph plots the market demand curve for rhodium. D AVC 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. D D 6 9 12 15 18 21 QUANTITY (Thousands of pounds) 24 27 30 -0- Supply (10 firms) Supply (20 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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