Consider the competitive market for rhodium. 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)80726456403224168004MC-D8ATCAVCPa1224 2016 20QUANTITY (Thousands of pounds)D32D36The following graph plots the market demand curve for rhodium.40Use 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)272645648403221600120DemandBecause you know that competitive firms earn$000 1080 1200240 360 460 600 720 640QUANTITY (Thousands of pounds).TrueFalse-0Supply (10 firms)$Supply (20 firms)-AIf there were 10 firms in this market, the short-run equilibrium price of rhodium would be swouldTherefore, in the long run, firms wouldSupply (30 firms)per pound. From the graph, you can see that this means there will be©per pound. At that price, firms in this industrythe rhodium market.economic profit in the long run, you know the long-run equilibrium price must befirms operating in the rhodium 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.Continue

The segment of the marginal cost curve that is located above the average variable cost curve is the…

PRICE (Dollars per pound) 2 80 72 64 8 56 48 40 32 24 16 A 0 120 240 360 450 600 720 640 000 1080 1200 QUANTITY (Thousands of pounds) Demand Because you know that competitive firms earn. -0 Supply (10 firms) If there were 10 firms in this market, the short-run equilibrium price of rhodium would be s would Therefore, in the long run, firms would True Supply (20 firms) 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 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.

PRICE (Dollars per pound) 2 80 72 64 8 56 48 40 32 24 16 A 0 120 240 360 450 600 720 640 000 1080 1200 QUANTITY (Thousands of pounds) Demand Because you know that competitive firms earn. -0 Supply (10 firms) If there were 10 firms in this market, the short-run equilibrium price of rhodium would be s would Therefore, in the long run, firms would True Supply (20 firms) 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 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.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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consider the competitive market for rhodium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the ame 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 40 32 24 10 6 0 4 MC-D ATC AVC D 8 12 16 20 24 20 32 36 40 QUANTITY (Thousands of pounds) The following graph plots the market demand curve for rhodium. ?
Table showing Market Demand Price Quantity Demanded Quantity Supplied $90 20 $65 30 $45 40 $35 50 $25 60 $15 70 $10 80 What is the equilibrium price and quantity given this information on demand in the market? Is each firm making a profit or loss? What is the amount of that profit or loss? What do you predict will happen over the long run? What if the information regarding market demand and market supply is conveyed in equations rather than tables? Practice how you would find equilibrium in a competitive market using equations for demand and supply. Suppose in a competitive market the market demand can be represented as follows: P=10−Q(andthusQ=10−P) and that market supply can be represented as follows: P=Q. Using the fact that at equilibrium the quantity demanded equals the quantity supplied, find the equilibrium price and quantity in this market.
(? 100 90 80 70 60 50 40 АТС 30 20 AVC 10 MC O 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of pounds) COSTS (Dollars per pound)
ok int rences Mc Graw Hill Aruna owns Pottery Plus, a small firm that produces terra cotta pots for sale in the Edmonton area. The graph below shows Aruna's demand curve. Price ($) 40 36 32 28 24 20 16 12 8 4 0 4 8 W (38, 19) 12 16 20 24 28 32 36 40 Quantity per period O Search > 3 of 6 SAMSUNG www Next >
2. Suppose that the market for wind chimes is a competitive market. The following graph shows the daily cost curves of a particular firm operating in this PRICE (Dollars per wind chime) 40 36 32 28 24 20 16 12 8 4 0 0 MC ATC 2 4 8 10 12 14 16 18 20 QUANTITY (Thousands of wind chimes per day) AVC 6 market: a) In short run, at a market price of $26 per wind chime, how much will firm choose to produce per day? How do you know? loss in si LIGHT OF LOSS IN SUCARAMIH OF HIS STAPAL. graph. c) What is this firm's shutdown price, that is the price below which it is optimal for the firm to shut down in short run? d) In the long run, all firms can enter and exit the market, and all entrants have the same costs as above. As this market makes the transition to its long-run equilibrium, will the price rise or fall? Will the quantity demanded rise or fall? Will the quantity supplied by each firm rise or fall? Explain your answers. e) Graph the long-run supply curve in equilibrium for this market,…
The following graph illustrates the market for small moving trucks in Bloomington, IN, during Indiana's fall move-in week. PRICE (Dollars per small truck) 100 90 80 70 80 50 40 30 20 10 0 Demand I 01 5,50 2 3 8 5 6 7 QUANTITY (Hundreds of small trucks) Supply 9 10 ? Suppose that SendIt is one of over a dozen competitive firms in the Bloomington area that offers moving truck rentals. Based on the preceding graph showing the weekly market demand and supply curves, the price SendIt must take as given is S
Consider a perfectly competitive market. Currently the equilibrium price is above the minimum of Average Total Cost. This is likely to result in _____________ and ___________ in price. A. Decrease in market demand; decrease in price B. Increase in market demand; increase in price C. Increase in market supply; and decrease D. Decrease in market supply; and decrease E. Increase in market supply; and increase F. Decrease in market supply; and increase
The following table shows the demand and supply for a popular pair of shoes sold by Akron Enterprise Limited (AEL). Price per pair $ Qty. Demanded Quantity supplied Market condition Presure on price 105 25000 75000 surplus downward 90 30000 70000 surplus downward 75 40000 60000 surplus downward 60 50000 50000 equilibrium No pressure 45 60000 35000 shortage upward 30 80000 20000 shortage upward 15 100000 5000 shortage upward Other information regarding AEL are as follows: Fixed cost = $2000 Variable Cost = 20Q Question 1 a. Graphically illustrate market equilibrium using the information in the above table. b. Explain and graphically illustrate a price floor implemented by the government using an appropriate price in the table above. c. If Akron Enterprise Limited sells its products at equilibrium price, calculate total revenue and total profit. d. At what level of price(s) identified above is a shut-down price for Akron Enterprise Limited. e. Graphically illustrate…
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A farmer produced 8400 tons of grapes and each ton sales for $200. Grapes are found to be a perfect cure for Corona Virus. As a result, the price of grapes went from $200 per ton to $10,000 per ton. How many tons will the farmer sale? Using your knowledge of price elasticity of supply, draw a graph illustrating this sale. What will happen in the market for grapes in one year if the price hold steady at $10, 000. Draw a graph showing this.