The following diagram shows the market demand for titanium. 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. PRICE (Dollars per pound) 100 90 2 28 29 70 60 50 40 30 20 10 0 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) Demand Supply (10 firms) True Supply (15 firms) False Supply (20 firms) If there were 10 firms in this market, the short-run equilibrium price of titanium would be s would Therefore, in the long run, firms would Because you know that competitive firms earn $ per pound. From the graph, you can see that this means there will be ? per pound. At that price, firms in this industry the titanlum market. economic profit in the long run, you know the long-run equilibrium price must be firms operating in the titanium 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.
The following diagram shows the market demand for titanium. 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. PRICE (Dollars per pound) 100 90 2 28 29 70 60 50 40 30 20 10 0 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) Demand Supply (10 firms) True Supply (15 firms) False Supply (20 firms) If there were 10 firms in this market, the short-run equilibrium price of titanium would be s would Therefore, in the long run, firms would Because you know that competitive firms earn $ per pound. From the graph, you can see that this means there will be ? per pound. At that price, firms in this industry the titanlum market. economic profit in the long run, you know the long-run equilibrium price must be firms operating in the titanium 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.
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter13: The Cost Of Production
Section: Chapter Questions
Problem 6PA
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