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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. PRICE (Dollars per pound) 80 72 64 56 48 40 24 16 8 0 0 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Thousands of pounds) Demand Because you know that competitive firms earn $ equilibrium. Supply (10 firms) If there were 30 firms in this market, the short-run equilibrium price of rhodium would be $ would . Therefore, in the long run, firms would O True Supply (20 firms) O False Supply (30 firms) per pound. From the graph, you can see that this means there will be (?) per pound. At that price, firms in this industry the rhodium market. economic profit in the long run, you know the long-run equilibrium price must be firms operating in the rhodium industry in long-run. True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit.

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. PRICE (Dollars per pound) 80 72 64 56 48 40 24 16 8 0 0 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Thousands of pounds) Demand Because you know that competitive firms earn $ equilibrium. Supply (10 firms) If there were 30 firms in this market, the short-run equilibrium price of rhodium would be $ would . Therefore, in the long run, firms would O True Supply (20 firms) O False Supply (30 firms) per pound. From the graph, you can see that this means there will be (?) per pound. At that price, firms in this industry the rhodium market. economic profit in the long run, you know the long-run equilibrium price must be firms operating in the rhodium industry in long-run. True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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7. Short-run supply and long-run equilibrium 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) 80 72 64 56 48 40 32 24 16 8 0 0 4 MC 8 ATC AVC ☐ 12 16 20 24 28 QUANTITY (Thousands of pounds) 32 36 ■ 40 (?)
Transcribed Image Text:7. Short-run supply and long-run equilibrium 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) 80 72 64 56 48 40 32 24 16 8 0 0 4 MC 8 ATC AVC ☐ 12 16 20 24 28 QUANTITY (Thousands of pounds) 32 36 ■ 40 (?)
The following graph plots the market demand curve for rhodium. 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. PRICE (Dollars per pound) 80 72 64 56 48 40 32 24 16 8 0 ← 0 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Thousands of pounds) Demand equilibrium. Supply (10 firms) If there were 30 firms in this market, the short-run equilibrium price of rhodium would be would . Therefore, in the long run, firms would O True Supply (20 firms) O False Supply (30 firms) Because you know that competitive firms earn economic profit in the long run, you know the long-run equilibrium price must be per pound. From the graph, you can see that this means there will be firms operating in the rhodium industry in long-run per pound. At that price, firms in this industry the rhodium market. True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit.
Transcribed Image Text:The following graph plots the market demand curve for rhodium. 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. PRICE (Dollars per pound) 80 72 64 56 48 40 32 24 16 8 0 ← 0 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Thousands of pounds) Demand equilibrium. Supply (10 firms) If there were 30 firms in this market, the short-run equilibrium price of rhodium would be would . Therefore, in the long run, firms would O True Supply (20 firms) O False Supply (30 firms) Because you know that competitive firms earn economic profit in the long run, you know the long-run equilibrium price must be per pound. From the graph, you can see that this means there will be firms operating in the rhodium industry in long-run per pound. At that price, firms in this industry the rhodium market. True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit.
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