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) 100 90 80 70 60 50 40 30 20 10 0 Demand 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) Supply (10 firms) Supply (20 firms) Supply (30 firms) (?) If there were 10 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 know that 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 ruthenium Industry In long-run $

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) 100 90 80 70 60 50 40 30 20 10 0 Demand 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) Supply (10 firms) Supply (20 firms) Supply (30 firms) (?) If there were 10 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 know that 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 ruthenium Industry In long-run $

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 first graph depicts the industry supply and demand for yoga classes. Assume that the market is initially in equilibrium at the intersection of lines D and S. The second graph is the cost information for a single firm in this perfectly competitive industry. Assume there is an increase in the industry demand for yoga classes and the industry demand curve moves from D to D1. Furthermore, assume this is a constant cost industry. Shift the supply (S) curve to the correct positions to reflect long-run equilibrium in this constant cost industry. Next, use the interactive line to trace out the long-run industry supply curve (LRIS) for this industry. Price per class Yoga Industry Supply and Demand Short-run marginal cost Long-run average cost Short-run average cost S Price=Marginal revenue DRIS D1 Quantity of classes Quantity of classes Price ($)
By how much would the market price of abortions and the number of abortions change if a lump-sum tax is assessed on abortion clinics that raises their minimum average cost by 10%? On the graph to the right, show the new long-run equilibrium price. 1.) Use the line drawing tool to draw the new demand curve and label the line d². 2.) Use the 3-point curved line drawing tool to draw the new average cost curve and label the curve AC². Carefully follow the instructions above, and only draw the required objects. Using the price elasticity of demand information from the "Abortion Market" application, calculate the decrease in the number of abortions from the lump sum tax. Abortions will decrease by as little as percent or by as much as percent. (round your answers to one decimal place) C Price/cost per abortion 490- 470- 450- 430- 410- 390- 370- 350- 330- 310- 290- 270- 250+ 100 AC2 d2 1 AC¹ P = MR 150 200 250 300 350 400 450 500 Abortions per year Q N
Mr DIY is a new small scale palm oil supplier. There are many small scale palm oil suppliers in the market. The price of oil palm is solely determined by the market demand and supply. Describe the perfectly competitive market of this industry. As Mr DIY is a new firm in the market, his firm is facing a problem of revenue lesser than the total variable costs. Illustrate the situation with an appropriate diagram(s). Evaluate the situation of this firm and provide one suggestion for the firm to sustain in the long run.
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.
If there were 10 firms in this market, the short-run equilibrium price of steel would be $______per ton. At that price, firms in this industry would ______(shut down/operate at a loss/ earn a positive profit/ earn zero profit). Therefore, in the long run, firms would__________(enter/ exit/ neither enter nor exit) the steel market. Because you know that competitive firms earn______(zero/ negative/ positive) economic profit in the long run, you know the long-run equilibrium price must be $_____per ton. From the graph, you can see that this means there will be_____(10/20/30) firms operating in the steel industry in long-run equilibrium.
ECON QUESTION
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
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Suppose that the perfectly competitive tuna Industry is In long-run equilibrium at a price of $3 per can of tuna and a quantity of 600 million cans per year. Suppose the Surgeon General Issues a report saying that eating tuna is bad for your health. The Surgeon General's report will cause consumers to demand Shift the supply curve, the demand curve, or both on the following diagram to illustrate these short-run effects of the Surgeon General's announcement. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. Supply X Demand 400 600 800 QUANTITY (Millions of cans) 0 0 In the long run, some firms will respond by 5 0 200 0 200 Demand 1000 Shift the supply curve, the demand curve, or both on the following diagram to Illustrate both the short-run effects of the Surgeon General's announcement and the new long-run equilibrium after firms…
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?