Consider the competitive market for copper. 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.   The following diagram shows the market demand for copper. Use the orange points (square symbol) to plot the initial 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.   If there were 60 firms in this market, the short-run equilibrium price of copper would be   per pound. At that price, firms in this industry would    . Therefore, in the long run, firms would    the copper market.   Because you know that 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 copper 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 positive accounting profit. True   False

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

Consider the competitive market for copper. 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.

 

The following diagram shows the market demand for copper.
Use the orange points (square symbol) to plot the initial 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.
 
If there were 60 firms in this market, the short-run equilibrium price of copper would be
 
per pound. At that price, firms in this industry would    . Therefore, in the long run, firms would    the copper market.
 
Because you know that 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 copper 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 positive accounting profit.
True
 
False
 
 

 

b My Questions | bartleby
* MindTap - Cengage Learning
A ng.cengage.com/static/nb/ui/evo/index.html?deploymentld=59828118170010561930692029148&elSBN=9780357133606&snapshotld=2556323&id=1270090816&
E Apps M Gmail
YouTube A Maps A clickserve.dartsearc.
E Reading list
«
* CENGAGEMINDTAP
Q Search this course
Love v
A My Home
Homework (Ch 14)
Courses
(?)
O Catalog and Study Tools
A-Z
EE Rental Options
80
P College Success Tips
72
Career Success Tips
64
56
ATC
? Help
O Give Feedback
40
32
24
bongo
18
AVC
8
MC O
+
3
12
15
18
21
24
27
30
QUANTITY (Thousands of pounds)
9:53 PM
P Type here to search
L
89%
44°F
O O 1)
12/8/2021
COSTS (Dollars per pound)
x ...
Transcribed Image Text:b My Questions | bartleby * MindTap - Cengage Learning A ng.cengage.com/static/nb/ui/evo/index.html?deploymentld=59828118170010561930692029148&elSBN=9780357133606&snapshotld=2556323&id=1270090816& E Apps M Gmail YouTube A Maps A clickserve.dartsearc. E Reading list « * CENGAGEMINDTAP Q Search this course Love v A My Home Homework (Ch 14) Courses (?) O Catalog and Study Tools A-Z EE Rental Options 80 P College Success Tips 72 Career Success Tips 64 56 ATC ? Help O Give Feedback 40 32 24 bongo 18 AVC 8 MC O + 3 12 15 18 21 24 27 30 QUANTITY (Thousands of pounds) 9:53 PM P Type here to search L 89% 44°F O O 1) 12/8/2021 COSTS (Dollars per pound) x ...
b My Questions | bartleby
* MindTap - Cengage Learning
A ng.cengage.com/static/nb/ui/evo/index.html?deploymentld=59828118170010561930692029148&elSBN=9780357133606&snapshotld=2556323&id=1270090816&
E Apps M Gmail
YouTube A Maps A clickserve.dartsearc.
E Reading list
«
* CENGAGEMINDTAP
Q Search this course
Love v
A My Home
Homework (Ch 14)
Courses
O Catalog and Study Tools
A-Z
EE Rental Options
80
P College Success Tips
72
Supply (20 firms)
64
Career Success Tips
56
Demand
? Help
48
Supply (40 firms)
O Give Feedback
40
32
Supply (60 firms)
24
bonge
18
8
120
240
380
480 00 720
840
960
1080 1200
QUANTITY (Thousands of pounds)
9:54 PM
P Type here to search
L
88%
44°F
O O O 4)
12/8/2021
PRICE (Dollars per pound)
x ...
Transcribed Image Text:b My Questions | bartleby * MindTap - Cengage Learning A ng.cengage.com/static/nb/ui/evo/index.html?deploymentld=59828118170010561930692029148&elSBN=9780357133606&snapshotld=2556323&id=1270090816& E Apps M Gmail YouTube A Maps A clickserve.dartsearc. E Reading list « * CENGAGEMINDTAP Q Search this course Love v A My Home Homework (Ch 14) Courses O Catalog and Study Tools A-Z EE Rental Options 80 P College Success Tips 72 Supply (20 firms) 64 Career Success Tips 56 Demand ? Help 48 Supply (40 firms) O Give Feedback 40 32 Supply (60 firms) 24 bonge 18 8 120 240 380 480 00 720 840 960 1080 1200 QUANTITY (Thousands of pounds) 9:54 PM P Type here to search L 88% 44°F O O O 4) 12/8/2021 PRICE (Dollars per pound) x ...
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 2 images

Blurred answer
Knowledge Booster
Short-run Supply Curve
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education