PRICE (Cents per bushel) 20 10 COST (Cents per bushel) 100 90 8 8 70 50 ATC 40 30 20 10 AVC 0 5 10 15 20 25 30 35 40 45 50 OUTPUT (Thousands of bushels) The following graph shows the market demand for wheat. MC 1. Use the orange points (square symbol) to plot the short-run industry supply curve for the wheat industry. Specifically, place an orange point at the lowest point of the supply curve and another orange point at the highest point of the supply curve. (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. Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.) 2. Place the black point (plus symbol) on the graph to indicate the short-run equilibrium price and quantity in this market. (Note: Dashed drop lines will automatically extend to both axes.) 100 Demand 90 80 70 60 0 0 350 700 1050 1400 1750 2100 2450 2800 3150 3500 QUANTITY (Thousands of bushels) Supply Curve + Equilibrium ? At the current short-run market price, firms will given the current market price. in the short run. In the long run, the market

PRICE (Cents per bushel) 20 10 COST (Cents per bushel) 100 90 8 8 70 50 ATC 40 30 20 10 AVC 0 5 10 15 20 25 30 35 40 45 50 OUTPUT (Thousands of bushels) The following graph shows the market demand for wheat. MC 1. Use the orange points (square symbol) to plot the short-run industry supply curve for the wheat industry. Specifically, place an orange point at the lowest point of the supply curve and another orange point at the highest point of the supply curve. (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. Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.) 2. Place the black point (plus symbol) on the graph to indicate the short-run equilibrium price and quantity in this market. (Note: Dashed drop lines will automatically extend to both axes.) 100 Demand 90 80 70 60 0 0 350 700 1050 1400 1750 2100 2450 2800 3150 3500 QUANTITY (Thousands of bushels) Supply Curve + Equilibrium ? At the current short-run market price, firms will given the current market price. in the short run. In the long run, the 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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The soybean industry is a constant cost industry. A new study revealing negative health effects of soymilk permanently decreases the number of buyers in the soybean market. Due to the decrease in demand, the equilibrium price of soybeans ______ in the long run, the equilibrium quantity of soybeans ______in the long run, and the number of firms in the market will _____ in the long run. Word Bank: Decreases, Decreases, Decreases, Increases, Increases, Increases, does not change, does not change, does not change.
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Suppose that the turkey industry is in long-run equilibrium at a price of $5 per pound of turkey and a quantity of 150 million pounds per year. Suppose that WebMD claims that the bacteria found in turkey will decrease your expected life span by 4 years. WebMD's claim will cause consumers to demand Shift the demand curve, the supply curve, or both on the following diagram to illustrate these short-run effects of WebMD's claim. PRICE (Dollars per pound) 10 9 8 3 2 1 0 0 30 turkey at every price. In the short run, firms will respond by 60 Supply Demand 90 120 150 180 210 240 270 300 QUANTITY (Millions of pounds) Demand Supply (?
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100 90 90 00 80 COSTS (Dollars) 70 70 00 60 50 40 30 20 10 ATC AVC MC 0 0 5 10 15 20 25 30 QUANTITY (Thousands of snapbacks) 35 35 40 45 50 For every price level given in the following table, use the graph to determine the profit-maximizing quantity of snapbacks for the firm. Further, select whether the firm will choose to produce, shut down, or be indifferent between the two in the short run. (Assume that when price exactly equals average variable cost, the firm is indifferent between producing zero snapbacks and the profit-maximizing quantity of snapbacks.) Lastly, determine whether the firm will earn a profit, incur a loss, or break even at each price. Price (Dollars per snapback) 10 20 32 40 50 60 Quantity (Snapbacks) Produce or Shut Down? Profit or Loss?
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The accompanying graph depicts the cost curves of an individual firm in a perfectly (or purely) competitive industry.