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 40 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 60 firms. (? 80 72 Supply (20 firms) 64 56 Demand 48 Supply (40 firms) 40 32 Supply (60 firms) 24 16 8 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Thousands pounds) PRICE (Dollars per pound)
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 40 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 60 firms. (? 80 72 Supply (20 firms) 64 56 Demand 48 Supply (40 firms) 40 32 Supply (60 firms) 24 16 8 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Thousands pounds) PRICE (Dollars per pound)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![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 40 firms. Finally, use the green points (triangle symbol) to
plot the short-run industry supply curve when there are 60 firms.
(?
80
72
Supply (20 firms)
64
56
Demand
48
Supply (40 firms)
40
32
Supply (60 firms)
24
16
8
120
240
360
480
600
720
840
960
1080 1200
QUANTITY (Thousands of pounds)
If there were 20 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
economic profit in the long run, you know the long-run equilibrium price must
be $
per pound. From the graph, you can see that this means there will be
firms operating in the copper industry in long-run
equilibrium.
PRICE (Dollars per pound)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffbe73a6e-faf1-4dc0-84f3-4d70f84bab22%2F00e24a72-9570-476c-bddb-d6e27ff860e2%2F68m967_processed.png&w=3840&q=75)
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 40 firms. Finally, use the green points (triangle symbol) to
plot the short-run industry supply curve when there are 60 firms.
(?
80
72
Supply (20 firms)
64
56
Demand
48
Supply (40 firms)
40
32
Supply (60 firms)
24
16
8
120
240
360
480
600
720
840
960
1080 1200
QUANTITY (Thousands of pounds)
If there were 20 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
economic profit in the long run, you know the long-run equilibrium price must
be $
per pound. From the graph, you can see that this means there will be
firms operating in the copper industry in long-run
equilibrium.
PRICE (Dollars per pound)
![6. Short-run supply and long-run equilibrium
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.
80
72
64
56
ATC
48
40
32
24
16
AVC
MC O
+
3
9.
12
15
18
21
24
27
30
QUANTITY (Thousands of pounds)
COSTS (Dollars per pound)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffbe73a6e-faf1-4dc0-84f3-4d70f84bab22%2F00e24a72-9570-476c-bddb-d6e27ff860e2%2F51wmo6g_processed.png&w=3840&q=75)
Transcribed Image Text:6. Short-run supply and long-run equilibrium
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.
80
72
64
56
ATC
48
40
32
24
16
AVC
MC O
+
3
9.
12
15
18
21
24
27
30
QUANTITY (Thousands of pounds)
COSTS (Dollars per pound)
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