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 15 firms. Finally, use the green points (triangle symbol) toplot the short-run industry supply curve when there are 20 firms.PRICE (Dollars per pound)100908070608504030201000 125 250 375 500 625 750 875 1000 1125 1250QUANTITY (Thousands of counda)DemandBecause you know that competitive firms earnSupply (10 firms)TrueSupply (15 firms)If there were 10 firms in this market, the short-run equilibrium price of rhenium would be 5Therefore, in the long run, firms wouldwouldFalseSupply (20 firms)per pound. From the graph, you can see that this means there will beⓇ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.per pound. At that price, firms in this industrythe rhenium market. Homework (Ch 14)7. Short-run supply and long-run equilibriumConsider the competitive market for rhenlum. 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)10082 283 282 270302000MC-D10ATCAVC30 40 50 60 10QUANTITY (Thousands of pounds)8090 100

Economic costs involve not just the accounting costs but also the opportunity cost of making one…

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 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 15 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 20 firms. 100 PRICE (Dollars per pound) 8 8 8 8 8 8 30 20 10 Demand 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of counda) Supply (10 firms) Supply (15 firma) Supply (20 firms)

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 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 15 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 20 firms. 100 PRICE (Dollars per pound) 8 8 8 8 8 8 30 20 10 Demand 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of counda) Supply (10 firms) Supply (15 firma) Supply (20 firms)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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9 Consider the competitive market for titanium. Assume that, regardless of how many firms are in the industry, ever n 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. Esc 78°F Sunny 100 COSTS (Dollars per pound) 90 80 70 60 4 50 + 40 + 30 20 10 0 MC O 05 F2 ATC AVC F3 0 10 15 20 25 30 35 40 QUANTITY (Thousands of pounds) 0+ ☐ F4 45 50 F5 H M OL F6 M (?) F7 10 F8 At ( F9 F10 F11 F12 2 Fn
If there were 60 firms in this market, the short-run equilibrium price of titanium would be $________ per kilogram. At that price, firms in this industry would (earn a positive profit, shut down, earn zero profit, operate at a loss). Therefore, in the long run, firms would ( enter, exit, neither enter nor exit) the titanium market. Because you know that perfectly competitive firms earn (positive, zero, negative) economic profit in the long run, you know the long-run equilibrium price must be $_______ per kilogram. From the graph, you can see that this means there will be (20, 40, 60) firms operating in the titanium industry in long-run equilibrium.
Illustrate to the right, a graph showing a company being profitable in a competitive market in the Long Run selling its product at Market Price (MP*) based on its Average Variable Cost (AVC) and Average Total Cost (ATC) and Marginal Cost (MC). Identify each key point on the graph. Observe the Short - Run Loss information illustrated in the graph to the right. With respect to Price (P*"), Average Variable Cost (AVC), Average Total Cost (ATC), Marginal Revenue (MR), and Marginal Cost (MC), what assumption would you make if the firm was selling its product at P What would happen if this were to continue in the long run? Is there a Shut Down point? ** ? Notice that MR = P
the orange square points on the marginal cost curve from low to high(16,12) (24,20),(30,36),(32,44),(34,52),(38,72)
Lesson 5.4 - Industry Adjustments to Increases in Demand 1. In a/an industry, an increase in demand will result in a new equilibrium price equal to the original equilibrium price (before demand increased). This results in a long-run supply curve that is 2. In a/an industry, an increase in demand will result in a new equilibrium price higher than the original equilibrium price (before demand increased). This results in a long-run supply curve that is sloping. 3. In a/an. industry, an increase in demand will result in a new equilibrium price lower than the original equilibrium price (before demand increased). This results in a long-run supply curve that is sloping.
Q4) Answer the following, providing a graphical illustration along with your answer where necessary: a) What is the profit maximising condition? b) Explain what is meant by abnormal profit? What is the adjustment process from short-run abnormal profit to long-run equilibrium in a perfectly competitive market? c) Please find below Pricing options for firm A and B, along with individual payoffs (Firm A's payoff/Firm B's payoff) Firm A Price £2 Price £1 Assume you are the pricing manager at Firm A; i) ii) Price £2 £10,000/£10,000 £12,000/£5,000 Firm B Price £1 £5,000/£12,000 £6,000/£6,000 What is your payoff for a 'maximin' strategy? What is your payoff for a 'maximax' strategy? Does a dominant strategy exist within this prisoners' dilemma?
Give an explanation to the answer and ensure all the steps are shown.
1) If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue: 2) A firm that is motivated by self interest should 3) If price is above the equilibrium level, competition among sellers to reduce the resulting 4) Camille's Creations and Julia's Jewels both sell beads in a competitive market. If at the market price of $5, both are running out of beads to sell (they can't keep up with the quantity demanded at that price), then we would expect both Camille's and Julia's to 5) Since their introduction, prices of DVD players have fallen and the quantity purchased has increased. This statement 6) In a market economy the distribution of output will be determined primarily by 7) In a competitive market economy firms will select the least-cost production technique because 8) Suppose that the price of peanuts falls from $3 to $2 per bushel and that, as a result, the total revenue received by peanut…
6. Short-run perfectly competitive equilibrium Consider a perfectly competitive market for wheat in New York City. There are 90 firms in the industry, each of which has the cost curves shown on the following graph: COST (Cents per bushel) 100 90 80 70 60 50 40 30 20 10 0 ATC 0 5 AVC 10 15 20 25 30 35 40 QUANTITY OF OUTPUT (Thousands of bushels) MC The following graph shows the market demand for wheat. 45 50 ?
The following figures depict the market supply and demand curves for a constant cost, competitive industry (left) and the per unit cost curves for a typical firm (right). For parts (a) and (c), below, you can again include your answers directly on the graph. A) Identify the short-run equilibrium in this market, indicating the price, aggregate quantity and the amount supplied by an individual firm. b) Explain why it is not a long-run equilibrium. c) Explain how the market would adjust to an equilibrium in the long-run
The following graph plots the market demand curve for ruthenium. 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 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 20 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 30 firms. PRICE (Dollars per pound) 80 72 64 03 58 Supply (10 firms) 48 Demand Supply (20 firms) 40 32 24 16 8 0 0 120 240 350 480 600 720 840 960 1080 1200 QUANTITY (Thousands of pounds) Supply (30 firms) ? If there were 20 firms in this market, the short-run equilibrium price of ruthenium would be $ would Therefore, in the long run, firms would per pound. At that price, firms in this industry the ruthenium market. Because you…
PRICE (Dollars per pound) 8. Short-run supply and long-run equilibrium Consider the competitive market for rhodium. Assume that no matter how many firms operate in the Industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. COSTS (Dollars per pound) 30,90 100 90 80 70 60 50 40 ATC 30 20 AVC 10 MC 0 0 + 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pounds) The following graph plots the market demand curve for rhodium. 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 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 20 firms. Finally, use the green points (triangle symbol) to plot the…