PLEASE ANSWER WITH GRAPH: Suppose that an industry is initially at a long-run competitive equilibrium. Originally,firms in the industry had very low fixed costs, but due to a new law, firms' fixed costs increased significantly. Throughoutall these changes, the industry remains competitive. Graphically show how this new law changes the industry in both theshort run and long run. To receive full credit, you must: Correctly show how the law changed the MC, AVC, ATC, LRS,Demand and Short - Run Supply Curves (if at all). Correctly show profits at the firm level immediately after the new lawis put in place and in the long run. Correctly show how the market will adjust to the new long-run competitiveequilibrium. Clearly show how the long-run equilibrium market quantity and market price

here are the graphs illustrating the changes in the industry due to an increase in fixed costs:…

Answered: PLEASE ANSWER WITH GRAPH: Suppose that…

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter24: Perfect Competition

Section: Chapter Questions

Problem 13E

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Please answer the question use this graph.
For second graph; suppose there are 10 firms in this industry, each of which has the cost curves previously shown.
Suppose that the perfectly competitive market for wheat spaghetti is in long-run equilibrium. Suppose also that campaigns for fighting obesity make students on lots of college campuses in the US aware of the fact that excessive pasta (including spaghetti) consumption has an adverse effect on body weight, and these campaigns provide an incentive for students to restrict spaghetti consumption. How do the campaigns described above affect the market for wheat spaghetti in the US, that is does the supply or the demand curve for wheat spaghetti shift and in what direction? How are the equilibrium price and quantity of wheat spaghetti affected in the short run? What happens to the short-run profit of the typical producer of wheat spaghetti in the US? What will be the price of wheat spaghetti in the long run? What profit will producers of wheat spaghetti make in the long run? Explain how this outcome is achieved. Use two graphs: one showing the market supply and demand curves for wheat…
Farmer Lee grows strawberries. The average total cost and marginal cost of growing strawberries in the long run for an individual farmer are illustrated in the graph to the right. Suppose the market price is $7.05 per box. If so, then farmers will strawberries until the market price is $ number rounded to two decimal places.) per box. (Enter a numeric the market for a real enter exit Price and cost (dollars per box) 10- 9- 8- 5- 3- 2- 1. 0 MC ATC 10 20 30 40 50 60 70 80 90 100 Quantity of strawberries (boxes per week) o
Concept: Calculate Profit Farmer Jones grows sugar. The average total cost and marginal cost of growing sugar for an individual farmer are illustrated in the graph to the right. Assume the rharket for sugar is perfectly competitive. According to the graph, farmer Jones will earn profit (positive economic profit as opposed to losses) at any market price above $10 per bushel. (Enter a numeric response using an integer.) Assume that the market price specifically is $24 per bushel. If farmer Jones produces the profit maximizing quantity, what will be her profit? $ To more easily identify the price and quantity, click on the graph to the right, and then adjust the slider to change the price and quantity. Each increment will increase the price by $2. Enter your answer in the answer box and then click Check Answer. 40- 36- 32- MC 28- 24- 20- Price and cost (dollars per bushel) 12- ATC 46 20 30 40 50 60 70 80 90 100 Quantity of Sugar (bushels per month) Question Help Q
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Profit is the incentive that drives our market economy. Firms make production, pricing, andhiring decisions based on their quest for profit. But what happens when a firm discoversthat it can make dramatically higher profits by stopping production altogether? In December2000, due to wild swings in the market for electricity, Kaiser Aluminium faced just such adecision.Kaiser Aluminium had contracted with Bonneville power for all of its electricity needs andfound itself in the unique position of being an electricity consumer and, potentially, anelectricity reseller. By December 2000, Kaiser faced a difficult decision of continuing itscurrent aluminium production and profit levels, or closing the plant to dramatically increaseits profit by simply reselling its electricity.When making production decisions, firms must consider both their costs and revenues. Oneimportant concern for many firms is utility costs. In 1996, Kaiser Aluminium Corporation inSpokane, Washington, entered into a…
Profit is the incentive that drives our market economy. Firms make production, pricing, andhiring decisions based on their quest for profit. But what happens when a firm discoversthat it can make dramatically higher profits by stopping production altogether? In December2000, due to wild swings in the market for electricity, Kaiser Aluminium faced just such adecision.Kaiser Aluminium had contracted with Bonneville power for all of its electricity needs andfound itself in the unique position of being an electricity consumer and, potentially, anelectricity reseller. By December 2000, Kaiser faced a difficult decision of continuing itscurrent aluminium production and profit levels, or closing the plant to dramatically increaseits profit by simply reselling its electricity.When making production decisions, firms must consider both their costs and revenues. Oneimportant concern for many firms is utility costs. In 1996, Kaiser Aluminium Corporation inSpokane, Washington, entered into a…
Profit is the incentive that drives our market economy. Firms make production, pricing, andhiring decisions based on their quest for profit. But what happens when a firm discoversthat it can make dramatically higher profits by stopping production altogether? In December2000, due to wild swings in the market for electricity, Kaiser Aluminium faced just such adecision.Kaiser Aluminium had contracted with Bonneville power for all of its electricity needs andfound itself in the unique position of being an electricity consumer and, potentially, anelectricity reseller. By December 2000, Kaiser faced a difficult decision of continuing itscurrent aluminium production and profit levels, or closing the plant to dramatically increaseits profit by simply reselling its electricity.When making production decisions, firms must consider both their costs and revenues. Oneimportant concern for many firms is utility costs. In 1996, Kaiser Aluminium Corporation inSpokane, Washington, entered into a…
Scenario 1-2Suppose a hat manufacturer currently sells 2,000 hats per week and makes a profit of $5,000 per week. The plant owner observes, "Although the last 300 hats we produced and sold increased our revenue by $1,000 and our costs by $1,100, we are still making an overall profit of $5,000 per week so I think we're on the right track. We are producing the optimal number of hats."Refer to Scenario 1-2. Using marginal analysis terminology, another economic term for the incremental cost of producing the last 300 hats is marginal cost. explicit cost. Any of the above terms are correct. operating cost.

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