The image is part of an educational exercise on analyzing supply and demand in a competitive market, specifically for titanium. Here's the transcription with an explanation of the graph:---**Instructions:**Use the orange points (square symbol) to plot the 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.**Graph Description:**- **Axes:** - Y-axis: Price ($ per pound) - X-axis: Quantity of Output (Thousands of pounds)- **Lines:** - Demand curve is shown as a downward-sloping line from a price of $72 at 0 quantity to about $26 at a quantity of 1200.- **Supply Curves:** - **Supply (20 firms):** Represented by orange squares. - **Supply (40 firms):** Represented by purple diamonds. - **Supply (60 firms):** Represented by green triangles.**Questions:**1. If there were 60 firms in this market, the short-run equilibrium price of titanium would be $____ per pound. At that price, firms in this industry would ____________. Therefore, in the long run, firms would ____________ the titanium market.2. Because you know that perfectly competitive firms earn _____ economic profit in the long run, you know the long-run equilibrium price must be $____ per pound. From the graph, you can see that this means there will be ______ firms operating in the titanium industry in long-run equilibrium.3. True or False: Each of the firms operating in this industry in the long run earns positive accounting profit. - ☐ True - ☐ False--- This exercise helps students understand how to determine equilibrium in the short run and long run in a competitive market environment, based on the number of firms and their supply curves. Consider the perfectly competitive market for titanium. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost ($MC$), average total cost ($ATC$), and average variable cost ($AVC$) curves shown on the following graph.**Graph Explanation:**- The graph displays the relationship between costs and output quantity.- The y-axis represents costs in dollars per pound, ranging from 0 to 80.- The x-axis represents the quantity of output in thousands of pounds, ranging from 0 to 30.**Curves:**1. **Marginal Cost ($MC$) Curve:** - Shown as a U-shaped curve, displayed in orange. - Starts high, decreases to a minimum, then rises again, illustrating that initially adding production units decreases costs before increasing them again.2. **Average Total Cost ($ATC$) Curve:** - Shown as a U-shaped curve, displayed in green. - Represents the average cost per unit when total costs are divided by the quantity of output.3. **Average Variable Cost ($AVC$) Curve:** - Shown as a U-shaped curve, displayed in purple. - Similar to the $ATC$ curve but only includes variable costs, excluding fixed costs.- A highlighted coordinate point, (18, 80), is marked on the $ATC$ curve, indicating a specific point where the quantity of output is 18,000 pounds, with an average total cost of 80 dollars per pound.

In the short run for a firm i a Perfectly competitive market, the price they charge for their goods…

Answered: Use the orange points (square symbol)…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider a perfectly competitive market for wheat in Dallas. There are 110 firms in the industry, each of which has the cost curves shown on the following graph: The following graph shows the market demand for wheat. Use the orange points (square symbol) to plot the short-run industry supply curve for the wheat industry. Specifically, place an orange point at the lowest point of the supply curve and another orange point at the highest point of the supply curve. (Note: 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. Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.) Then, place the black point (plus symbol) on the graph to indicate the short-run equilibrium price and quantity in this market. (Note: Dashed drop lines will automatically extend to both axes.) At the current short-run market price,…
Consider the perfectly competitive market for titanium. Assume that, regardless of how many firms are in the industry, every firm in the industry is identical and faces the marginal cost ( MCMC ), average total cost ( ATCATC ), and average variable cost ( AVCAVC ) curves shown on the following graph
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1.500 $72 $68 $64 $60 $56 $52 $48 $44 $40 $36 $32 $28 $24 $20 $16 $12 $8 $4 $0 1,800 2,100 2,400 2,700 3.000 3.300 3.600 3,900 Market Supply and Demand Functions $72 $68 $64 $60 $56 $52 $48 $44 $40 Cost Functions for a Typical Firm in the Industry XY $36 $32 $28 $24 $20 $16 $12 4,200 4,500 $4 $0 0 2 4 6 8 10 12 14 16 18 20
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