The diagram to the right shows the long-run equilibrium for a competitive market for three different levels of demand (Do, D₁, and D₂). Assume that firms earn a normal level of profits at each market equilibrium. Illustrate the long-run industry supply curve. Using the line drawing tool, draw the long-run industry supply curve. Label this curve "LRIS'. Note: Carefully follow the instructions above and only draw the required object.

The diagram to the right shows the long-run equilibrium for a competitive market for three different levels of demand (Do, D₁, and D₂). Assume that firms earn a normal level of profits at each market equilibrium. Illustrate the long-run industry supply curve. Using the line drawing tool, draw the long-run industry supply curve. Label this curve "LRIS'. Note: Carefully follow the instructions above and only draw the required object.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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10 The industry in the figure given below on the left consists of many firms with identical cost structures, and the industry experiences constant returns to scale. a. Draw the short-run market supply curve up to 4,000 units of output. Instructions: Use the tool provided (SRMSC) to draw the short-run market supply curve. Plot three points total. b. Draw the long-run market supply curve from zero to 4,000 units of output. Instructions: Use the tool provided (LRMSC) tool to draw the long-run market supply curve. Plot only the endpoints across the entire output range (0 to 4,000). Price ($) 50 40 40 Typical Firm Market Price ($) 50 MC ATC 40 30 AVC 20 20 10 0 10 20 20 30 Quantity 40 40 50 50 30 20 20 10 0 D Tools / LRMSC SRMSC 1000 2000 3000 4000 5000 Quantity
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Suppose that a competitive industry is buying and selling at an equilibrium price of $12. Now suppose that demand increases. If the market is an increasing cost industry, which of the following would we expect to happen in the long run? (select all that apply) The equilibrium price will be lower than $12 in the long run The equilibrium price will be at the minimum firm's LAC 0 The equilibrium price will stay at $12 in the long run The equilibrium price will be higher than $12 in the long run
Draw a graph to explain as well Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.