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The following diagram shows the market demand for copper. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (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.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 40 firms. PRICE (Dollars per pound) 100 90 80 70 60 50 40 30 20 10 0 0 Demand 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) ITT Supply (20 firms) Supply (30 firms) Supply (40 firms) If there were 30 firms in this market, the short-run equilibrium price of copper would be $ per pound. At that price, firms in this industry would Therefore, in the long run, firms would the copper market. Because you know that perfectly competitive firms earn run, you know the long-run equilibrium price must be $ can see that this means there will be equilibrium, economic profit in the long per pound. From the graph, you firms operating in the copper industry in long-run

The following diagram shows the market demand for copper. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (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.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 40 firms. PRICE (Dollars per pound) 100 90 80 70 60 50 40 30 20 10 0 0 Demand 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) ITT Supply (20 firms) Supply (30 firms) Supply (40 firms) If there were 30 firms in this market, the short-run equilibrium price of copper would be $ per pound. At that price, firms in this industry would Therefore, in the long run, firms would the copper market. Because you know that perfectly competitive firms earn run, you know the long-run equilibrium price must be $ can see that this means there will be equilibrium, economic profit in the long per pound. From the graph, you firms operating in the copper industry in long-run

ENGR.ECONOMIC ANALYSIS
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 following diagram shows the market demand for copper. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (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.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 40 firms. PRICE (Dollars per pound) 100 90 80 70 60 50 40 30 20 10 0 0 Demand 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) Supply (20 firms) Supply (30 firms) HHAH Supply (40 firms) If there were 30 firms in this market, the short-run equilibrium $ per pound. At that price, firms in this industry would Therefore, in the long run, firms would Because you know that perfectly competitive firms earn run, you know the long-run equilibrium price must be $ I can see that this means there will be equilibrium, price of copper would be the copper market. economic profit in the long per pound. From the graph, you firms operating in the copper industry in long-run
Transcribed Image Text:The following diagram shows the market demand for copper. Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (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.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 40 firms. PRICE (Dollars per pound) 100 90 80 70 60 50 40 30 20 10 0 0 Demand 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) Supply (20 firms) Supply (30 firms) HHAH Supply (40 firms) If there were 30 firms in this market, the short-run equilibrium $ per pound. At that price, firms in this industry would Therefore, in the long run, firms would Because you know that perfectly competitive firms earn run, you know the long-run equilibrium price must be $ I can see that this means there will be equilibrium, price of copper would be the copper market. economic profit in the long per pound. From the graph, you firms operating in the copper industry in long-run
Consider the perfectly competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. COSTS (Dollars per pound) 100 8 8 8 8 8 90 80 60 70 60 50 40 30 10 + 0 100 T 0 MC D + ATC AVC The following diagram shows the market demand for copper. 5 10 15 20 25 30 35 40 QUANTITY (Thousands of pounds) 45 Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (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.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 40 firms. 50 D Supply (20 firms) ? Supply (30 firms) (?)
Transcribed Image Text:Consider the perfectly competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. COSTS (Dollars per pound) 100 8 8 8 8 8 90 80 60 70 60 50 40 30 10 + 0 100 T 0 MC D + ATC AVC The following diagram shows the market demand for copper. 5 10 15 20 25 30 35 40 QUANTITY (Thousands of pounds) 45 Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 20 firms in the market. (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.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 40 firms. 50 D Supply (20 firms) ? Supply (30 firms) (?)
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