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 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.8072Supply (10 firms)645648DemandSupply (20 firms)4032Supply (30 firms)241681202403604806007208409601080 1200QUANTITY (Thousands of pounds)If there were 10 firms in this market, the short-run equilibrium price of copper would be $per pound. At that price, firms in this industrywould. Therefore, in the long run, firms wouldthe copper market.Because you know that competitive firms earneconomic profit in the long run, you know the long-run equilibrium price must be$per pound. From the graph, you can see that this means there will befirms operating in the copper industry in long-runequilibrium.PRICE (Dollars per pound) 7. Short-run supply and long-run equilibriumConsider the competitive market for copper. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical andfaces the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph.8072645648ATC403224AVC16MC O8481216202428323640QUANTITY (Thousands of pounds)The following diagram shows the market demand for copper.COSTS (Dollars per pound)

In a perfectly competitive market, the supply curve is the same as the marginal cost curve of the…

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.

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.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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