Answered: in the first picture Consider the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

in the first picture Consider the perfectly competitive market for copper. 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.

in the second picture, graph the supply curves when there are 20, 30, and 40 firms in the market

If there were 20 firms in this market, the short-run equilibrium price of copper would be ________

per pound. At that price, firms in this industry would ____________ . Therefore, in the long run, firms would __________ the copper market.

Because you know that perfectly 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 copper industry in long-run equilibrium.

True or False: Each of the firms operating in this industry in the long run earns negative accounting profit.

True

False

100
90
80
70
60
50
40
АТС
30
20
AVC
10
MC
5
10
15
20
25
30
35
40
45
50
QUANTITY OF OUTPUT (Thousands of pounds)
COSTS (Dollars per pound)

CENGAGE MINDTAP
Q Search this course
Homework (Ch 07)
Use the orange points (square symbol) to plot the 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 point
(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.
100
90
Supply (20 firms)
80
70
60
Supply (30 firms)
50
40
Supply (40 firms)
Demand
30
10
123
250
373
500
623
750
873
1000 1123 1250
QUANTITY OF OUTPUT (Thousands of pounds)
PRICE (Dollars per pound)
20

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions