Consider the competitive market for rhodium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. COSTS (Dollars per pound) s per pound) 80 72 64 56 80 48 72 40 64 56 48 40 32 24 16 8 0 0 3 MC ATC Demand The following graph plots the market demand curve for rhodium. D AVC 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. D D 6 9 12 15 18 21 QUANTITY (Thousands of pounds) 24 27 30 -0- Supply (10 firms) Supply (20 firms)

Consider the competitive market for rhodium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. COSTS (Dollars per pound) s per pound) 80 72 64 56 80 48 72 40 64 56 48 40 32 24 16 8 0 0 3 MC ATC Demand The following graph plots the market demand curve for rhodium. D AVC 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. D D 6 9 12 15 18 21 QUANTITY (Thousands of pounds) 24 27 30 -0- Supply (10 firms) Supply (20 firms)

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 3P

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