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)80726456484032241680Demand0 120 240 360 480 600 720 840 960 1080 1200QUANTITY (Thousands of pounds)Because you know that competitive firms earnSupply (10 firms)Supply (20 firms)True4If there were 30 firms in this market, the short-run equilibrium price of rhenium would be swouldTherefore, in the long run, firms wouldO FalseSupply (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 rhenium market.economic profit in the long run, you know the long-run equilibrium price must befirms 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 negative accounting profit. Suppose that the jackfruit industry is initially operating in long-run equilibrium at a price level of $5 per pound of jackfruit and quantity of 175 millionpounds per year. Suppose a top medical journal publishes research that animal-alternative protein sources such as jackfruit could increase yourexpected lifespan by 4 years.The publication is expected to cause consumers to demand jackfruit at every price. In the short run, firms will respondbyShift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the publication.PRICE (Dollars per pound)109200SupplyIn the long run, some firms will respondbyDemand35 70 105 140 175 210 245 280 315 350QUANTITY (Millions of pounds)untilDemandSupply

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Suppose that the jackfruit industry is initially operating in long-run equilibrium at a price level of $5 per pound of jackfruit and quantity of 175 million pounds per year. Suppose a top medical journal publishes research that animal-alternative protein sources such as jackfruit could increase your expected lifespan by 4 years. The publication is expected to cause consumers to demand jackfruit at every price. In the short run, firms will respond by Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the publication. PRICE (Dollars per pound) 10 9 2 1 0 Supply In the long run, some firms will respond by Demand 0 35 70 105 140 175 210 245 280 315 350 QUANTITY (Millions of pounds) until Demand Supply

Suppose that the jackfruit industry is initially operating in long-run equilibrium at a price level of $5 per pound of jackfruit and quantity of 175 million pounds per year. Suppose a top medical journal publishes research that animal-alternative protein sources such as jackfruit could increase your expected lifespan by 4 years. The publication is expected to cause consumers to demand jackfruit at every price. In the short run, firms will respond by Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the publication. PRICE (Dollars per pound) 10 9 2 1 0 Supply In the long run, some firms will respond by Demand 0 35 70 105 140 175 210 245 280 315 350 QUANTITY (Millions of pounds) until Demand Supply

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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