If there were 10 firms in this market, the short-run equilibrium price of rhenium would be $___ per pound. At that price, firms in this industry would (shut down/ earn a positive profit/ operate at a loss/ earn zero profit). Therefore, in the long run, firms would (enter/ exit/ neither enter nor exit) the rhenium market. Because you know that competitive firms earn (zero/ positive/ negative) 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 (10/ 20/ 30) firms operating in the rhenium industry in long-run equilibrium. True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns positive accounting profit.- True- False The following graph plots the market demand curve for rhenium.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 candisregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use thepurple points (diamond symbol) to plot the short-run industry supply curve when there are 20 firms. Finally, use the green points (triangle symbol) toplot the short-run industry supply curve when there are 30 firms.PRICE (Dollars per pound)10090807060504030201000Demand125 250 375 500 625 750 875 1000 1125 1250QUANTITY (Thousands of pounds)Supply (10 firms)Supply (20 firms)Supply (30 firms)? Consider the competitive market for rhenium. Assume that no matter how many firms operate in the industry, every firm is identical and faces thesame marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph.COSTS (Dollars per pound)10090807060504030201000MC5ATCAVC+10 15 20 25 30 35QUANTITY (Thousands of pounds)404550(?)

Profit maximizing level of output for a competitive firm is at the level of output where price (P)…

Answered: If there were 10 firms in this 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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If there were 10 firms in this market, the short-run equilibrium price of rhenium would be $___ per pound. At that price, firms in this industry would (shut down/ earn a positive profit/ operate at a loss/ earn zero profit). Therefore, in the long run, firms would (enter/ exit/ neither enter nor exit) the rhenium market.

Because you know that competitive firms earn (zero/ positive/ negative) 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 (10/ 20/ 30) firms operating in the rhenium industry in long-run equilibrium.

True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns positive accounting profit.

- True

- False

The following graph plots the market demand curve for rhenium.
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)
100
90
80
70
60
50
40
30
20
10
0
0
Demand
125 250 375 500 625 750 875 1000 1125 1250
QUANTITY (Thousands of pounds)
Supply (10 firms)
Supply (20 firms)
Supply (30 firms)
?

Consider the competitive market for rhenium. 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)
100
90
80
70
60
50
40
30
20
10
0
0
MC
5
ATC
AVC
+
10 15 20 25 30 35
QUANTITY (Thousands of pounds)
40
45
50
(?)

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