at, if anything, will happen to the supply curve, market price, the optimal output of an individual firm, the total number of firms in the industry, and the individual firm’s profit? Assume the natural gas industry is still living with the short-run supply disruption. Then unusually warm weather causes demand for natural gas to decrease unexpectedly. Analyze the impact of this reduction in demand in for natural gas.
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Consider the equilibrium depicted as your final short-run equilibrium (SRE) in Question 3. Is your price depicted in Question 3, P2, a Long Run
Assume the natural gas industry is still living with the short-run supply disruption. Then unusually warm weather causes demand for natural gas to decrease unexpectedly. Analyze the impact of this reduction in demand in for natural gas.
- For this analysis, assume the natural gas industry is
perfectly competitive , demand is downward sloping, supply is upward sloping, and production technology results in traditional U-shapedATC andAVC curves. - Finally, for questions 1, 2, 3, and 4, market price is always greater than the minimum of the AVC curve.
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- Consider the equilibrium depicted as your final short-run equilibrium (SRE). Is your price depicted in P2, a Long Run Equilibrium price for the natural gas industry? If so, explain why. If P2 is not a Long Run Equilibrium price, please explain what changes must take place to return the industry to long run equilibrium. As part of these changes, what, if anything, will happen to the supply curve, market price, the optimal output of an individual firm, the total number of firms in the industry, and the individual firm’s profit? assume the natural gas industry is perfectly competitive, demand is downward sloping, supply is upward sloping, and production technology results in traditional U-shaped ATC and AVC curves. market price is always greater than the minimum of the AVC curve.Short-run supply and long-run equilibrium Consider the 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. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.Mobile phones and mobile phone technology have generated significant advances in communication. You love your new job for Mobile Mint Inc., a rising player in the mobile phone industry. In a recent report on CNBC, industry analysts have reported falling prices in mobile phones along with an increased amount available in production. Using a supply and demand framework for mobile phones, which of the following statement best describes which events could have caused these changes? You will present this analysis to the board of directors at the next quarterly meeting. Student hint: this material is covered in Chapter 8 of Froeb et al. is time with a a) shock from a disruption to transit routes for microchips, an input to mobile phones Ob) chargers b. a stationary supply curve and an increase in the price of mobile phone Oc) c. an industry-wide innovation in the production process to make mobile phones d) d. a stationary demand curve and a shifting right supply curve over time O e) e. c and…
- Suppose that the demand for the product decreases. Arrange the events in the order in which they occur after demand decreases until price returns to long‑run equilibrium. Note that not all of the events need to be placed. After demand decreases firms enter price increases supply decreases firms exit price decreases supply increases Until the market returns to long‑run equilibrium priceconsider the market for corn in August 2020, a period where grain prices were quite low and the market for corn was in a short-run equilibrium. Draw a graph that shows supply and demand analysis for corn in August 2020 (put P on the vertical axis and Q on the horizontal axis). This graph will serve as a starting point for your analysis in Questions 2 and 3.In drawing this graph, please assume that the demand curve is downward sloping and supply curve is upward sloping Clearly show the market equilibrium in August 2020. Label the supply curve as S0; demand curve as D0; the equilibrium price as P0; and equilibrium quantity as Q0.The following table gives information about a firm’s short-run cost function in a perfectly competitive industry – candy manufacturing. a) What quantity will the firm supply when price of candy is $2? When price is $5? When price is $8? b) Consider the case where price = $2. Suppose that you have been renting capital (a candy-making machine) for a long time under a long-run capital rental agreement, but now the rental contract is about to expire. Should you renew your capital rental contract or not? Explain why or why not. How would your answer change if price is $5? How would your answer change if price is $8? Quantity Total Cost Average Variable Cost Average Total Cost Marginal Cost 0 10 1 15 5 15 5 2 17 3.5 8.5 2 3 18 2.66667 6 1 4 20 2.5 5 2 5 25 3 5 5 6 33 3.83333 5.5 8
- The coffee and tea demand functions depend on both prices. Suppose the demand curves for coffee and tea are Qc = 120 − 2pc + pt and Qt = 90 − 2pt + pc, where Qc is the quantity of coffee, Qt is the quantity of tea, pc is the price of coffee, and pt is the price of tea. These crops are grown in separate parts of the world, so their supply curves are not interrelated. We assume that the short-run, inelastic supply curves for coffee and tea are Qc = 45 and Qt = 30. Solve for the equilibrium prices and quantities. Now suppose that a freeze shifts the short-run supply curve of coffee to Qc = 30. How does the freeze affect the prices and quantitiesConsider the market for electronic components ("chips") and assume that there is complete competition.1a) Graph the short-run market equilibrium in a supply-demand diagram. 1b) Due to entry restrictions, there are long waiting times and thus supply passports. Show what impact these supply bottlenecks have on the market for electric cars. For this purpose, graphically represent the situation with and without supply bottlenecks in a supply-demand diagram. Label the old and new market equilibrium as well as the new and old consumer and producer surplus. Be sure to include the necessary labels in your diagram. 1c) Since the effects on the market for electric cars related to the supply bottleneck are not desirable from a macroeconomic perspective, the government is considering intervening with economic policy measures. In your diagram from 1b), show why the effects addressed are not desirable from a macroeconomic perspective. Also explain this briefly in the text or annotated keywords.1d)…Suppose that the seitan industry is initially operating in long-run equilibrium at a price level of $5 per pound of seitan and quantity of 175 million pounds per year. Suppose a top medical journal publishes research that animal-alternative protein sources such as seitan could increase your expected lifespan by 5 years. The publication is expected to cause consumers to demand (less/more) seitan at every price. In the short run, firms will respond by ( attached image). Shift the demand curve, the supply curve, or both on the following graph to illustrate these short-run effects of the publication In the long run, some firms will respond by (attached image) until (consumer demand returns to original level, each firm in the industry is once again earning zero profit, seitan populations grow large enough to support more firms, new technologies are discovered that lower costs) Now Shift the demand curve, the supply curve, or both on another graph (same as the first) to illustrate both…
- Suppose the market for corn is a purely competitive, constant-cost industry that is in long-run equilibrium. Now assume that an increase in consumer demand occurs. After all resulting adjustments have been completed, the new equilibrium price will be the same as the initial equilibrium price, and the industry output will remain unchanged. greater than the initial price, and the new industry output will be greater than the original output. the same as the initial equilibrium price, but the new industry output will be greater than the original output. less than the initial price, but the new industry output will be greater than the original output.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-runThe 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 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 56 48 40 32 24 16 8 0 Demand 0 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Thousands of pounds) Because you know that competitive firms earn Supply (10 firms) Supply (20 firms) True 4 If there were 30 firms in this market, the short-run equilibrium price of rhenium would be s would Therefore, in the long run, firms would O False Supply (30 firms) per pound. From the graph, you can…