Consider the competitive market for steel. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. NOTE: here are the blank question choices At that price, firms in this industry would _____ (earn zero profit OR earn a positive profit OR shut down OR operate at a loss). Therefore, in the long run, firms would ______ (enter OR exit OR nither enter or exit) the steel market. Because you know that competitive firms earn ______ (negative OR postive OR zero) economic profit in the long run, you know the long-run equilibrium price must be $______ per tonne. From the graph, you can see that this means there will be ______ (20 or 30 or 40) firms operating in the steel industry in long-run equilibrium. NOTE: PLEASE CLEARLY STATE THE X and Y coordinates of EACH POINT PLOTTED Consider the competitive market for steel. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical andfaces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph.100908070605040ATC3020AVC10MC O51015253035404550QUANTITY (Thousands of tonnes)costS (Dollars pertonne)20 The following diagram shows the market demand for steel.On the graph below, use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 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 30 firms. Finally, use the green points(triangle symbol) to plot the short-run industry supply curve when there are 40 firms.10090Supply (20 firms)807060Supply (30 firms)5040Supply (40 firms)Demand302010125250375500625750875 1000 1125 1250QUANTITY (Thousands of tonnes)If there were 20 firms in this market, the short-run equilibrium price of steel would be s. Therefore, in the long run, firms wouldper tonne. At that price, firms in this industry wouldthe steel market.Because you know that competitive firms earneconomic profit in the long run, you know the long-run equilibrium price must beper tonne. From the graph, you can see that this means there will befirms operating in the steel industry in long-runequilibrium.True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns positive accounting profit.O TrueO FalsePRICE (Dollars pertonne)

Answered: Image /qna-images/answer/862fbd6e-a6ff-4c1a-a88e-46dd8cede975.jpg

Answered: Consider the competitive market for…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Question

Consider the competitive market for steel. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph.

NOTE: here are the blank question choices

At that price, firms in this industry would _____ (earn zero profit OR earn a positive profit OR shut down OR operate at a loss). Therefore, in the long run, firms would ______ (enter OR exit OR nither enter or exit) the steel market.

Because you know that competitive firms earn ______ (negative OR postive OR zero) economic profit in the long run, you know the long-run equilibrium price must be $______ per tonne. From the graph, you can see that this means there will be ______ (20 or 30 or 40) firms operating in the steel industry in long-run equilibrium.

NOTE: PLEASE CLEARLY STATE THE X and Y coordinates of EACH POINT PLOTTED