Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variablecost (AVC) curves for a typical firm in the industry.COSTS (Dollars)1009080702010005MCATC0AVC■10 15 20 25 30 35QUANTITY (Thousands of jackets)404550(? Suppose there are firms in this industry, each of which has the cost curves previously shown.On the following graph, use the orange points (square symbol) to plot points along the portion of the industry's short-run supply curve thatcorresponds to prices where there is positive output. (Note: You are given more points to plot than you need.) Then, place the black point (plussymbol) on the graph to indicate the short-run equilibrium price and quantity in this market.Note: Dashed drop lines will automatically extend to both axes.PRICE (Dollars per jacket)10090807020100Demand45135 180 225 270 315 360 405QUANTITY (Thousands of jackets)90At the current short-run market price, firms will450Industry's Short-Run Supply+Equilibriumin the short run. In the long run,(?)

Cost curves represent the various levels of costs paid throughout the production of goods. As the amount produced varies, the cost curve shifts. The marginal cost, average total cost, average variable cost, and other cost curves are examples of cost curves. The additional cost incurred while producing one extra unit of a good or service is known as the marginal cost. Given that fixed costs do not change while output does, it is derived from the variable cost of production. Therefore, once production has started, adding another unit of a good or service has no additional fixed costs. Price (dollars per jacket) Quantity (thousands of jackets per firm) Quantity (thousands of jackets for 9 firms) 20 30 270 30 35 315 40 37 333 50 40 360 60 43 387 There are 9 firms .This means that the industry's supply curve will be horizontally summation of five individual supply curves. At the price level of $40 the quantity supplied is 37000 units ;this means that industry's supply is 33300 (37000x9) The graph below depicts the industry's short run supply curve: The curve S shows the industry’s supply curve. The short run equilibrium price is $40 and the short run equilibrium quantity is 33300 units of jackets. At the short run market price, firms will produce in the short run as the average variable cost is lesser than the market price and will exit in the long run as the average total cost is greater than the market price.

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Economics

Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. COSTS (Dollars) 100 90 80 70 60 30 20 10 0 0 5 MC ATC ☐ AVC ☐ 10 15 20 25 30 35 QUANTITY (Thousands of jackets) 40 ☐ 45 50 (?)

Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. COSTS (Dollars) 100 90 80 70 60 30 20 10 0 0 5 MC ATC ☐ AVC ☐ 10 15 20 25 30 35 QUANTITY (Thousands of jackets) 40 ☐ 45 50 (?)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3.3
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