At the current short-run market price, firms will __________ in the short run. In the long run, ____________ the market given the current market price. Consider a perfectly competitive market for wheat in Denver. There are 120 firms in the industry, each of which has the cost curves shown on thefollowing graph:10090MC807060АТС50AVC2010101520253035404550QUANTITY OF OUTPUT (Thousands of bushels)4030COST (Cents per bushel) Jse the orange points (square symbol) to plot the short-run industry supply curve for the wheat industry. Specifically, place an orange point at theowest 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 supplycurve 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 likehem connected. Line segments will connect the points automatically.) Then, place the black point (plus symbol) on the graph to indicate the short-ruiequilibrium price and quantity in this market. (Note: Dashed drop lines will automatically extend to both axes.)100Demand90Supply Curve807060Equilibrium504030201060012001800 2400 3000 3600 4200 4800 5400 6000QUANTITY OF OUTPUT (Thousands of bushels)PRICE (Cents per bushel)

Answer - Given in the question-

At the current short-run market price, firms will __________ in the short run. In the long run, ____________ the market given the current market price.

At the current short-run market price, firms will in the short run. In the long run, __ the market given the current market price.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter22: Perfect Competition

Section22.1: The Theory Of Perfect Competition

Problem 4ST

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