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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 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 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 40 firms. Note: Points will snap to the quantities of output 100 90 Supply (20 firms) 80 70 60 Supply (30 firms) 50 40 Supply (40 firms) Demand 30 20 10 123 250 373 500 023 750 873 1000 1123 1250 QUANTITY (Thousands of kilograms) If there were 30 firms in this market, the short-run equilibrium price of titanium would be| $15 per kilogram. At that price, firms in this industry would operate at a loss . Therefore, in the long run, firms would exit the titanium market. Because you know that perfectly competitive firms earn zero economic profit in the long run, you know the long-run equilibrium price must be 5 |per kilogram. From the graph, you can see that this means there will be firms operating in the titanium industry in long-run equilibrium. True or False: Each of the firms operating in this industry in the long run earns negative accounting profit. O True False PRICE (Dollars per kil ogram)

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 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 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 40 firms. Note: Points will snap to the quantities of output 100 90 Supply (20 firms) 80 70 60 Supply (30 firms) 50 40 Supply (40 firms) Demand 30 20 10 123 250 373 500 023 750 873 1000 1123 1250 QUANTITY (Thousands of kilograms) If there were 30 firms in this market, the short-run equilibrium price of titanium would be| $15 per kilogram. At that price, firms in this industry would operate at a loss . Therefore, in the long run, firms would exit the titanium market. Because you know that perfectly competitive firms earn zero economic profit in the long run, you know the long-run equilibrium price must be 5 |per kilogram. From the graph, you can see that this means there will be firms operating in the titanium industry in long-run equilibrium. True or False: Each of the firms operating in this industry in the long run earns negative accounting profit. O True False PRICE (Dollars per kil ogram)

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider the perfectly 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 ( MCMC ), average total cost ( ATCATC ), and average variable cost ( AVCAVC ) curves shown on the following graph

(? 100 90 27.5, 70 80 70 60 22. 5 40 50 40 ATC 30 20 AVC 10 MC O 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of kilograms) COSTS (Dollars per kilogram)
Transcribed Image Text:(? 100 90 27.5, 70 80 70 60 22. 5 40 50 40 ATC 30 20 AVC 10 MC O 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of kilograms) COSTS (Dollars per kilogram)
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 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 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 40 firms. Note: Points will snap to the quantities of output (? 100 90 Supply (20 firms) 80 70 60 Supply (30 firms) 50 40 Supply (40 firms) Demand 30 20 10 123 250 373 500 623 750 873 1000 1123 1250 QUANTITY (Thousands of kilograms) If there were 30 firms in this market, the short-run equilibrium price of titanium would be $15 per kilogram. At that price, firms in this industry would operate at a loss v . Therefore, in the long run, firms would exit the titanium market. Because you know that perfectly competitive firms earn v economic profit in the long run, you know the long-run equilibrium price must zero be $ per kilogram. From the graph, you can see that this means there will be v firms operating in the titanium industry in long-run equilibrium. True or False: Each of the firms operating in this industry in the long run earns negative accounting profit. O True O False PRICE (Dollars per kilogram)
Transcribed Image Text: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 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 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 40 firms. Note: Points will snap to the quantities of output (? 100 90 Supply (20 firms) 80 70 60 Supply (30 firms) 50 40 Supply (40 firms) Demand 30 20 10 123 250 373 500 623 750 873 1000 1123 1250 QUANTITY (Thousands of kilograms) If there were 30 firms in this market, the short-run equilibrium price of titanium would be $15 per kilogram. At that price, firms in this industry would operate at a loss v . Therefore, in the long run, firms would exit the titanium market. Because you know that perfectly competitive firms earn v economic profit in the long run, you know the long-run equilibrium price must zero be $ per kilogram. From the graph, you can see that this means there will be v firms operating in the titanium industry in long-run equilibrium. True or False: Each of the firms operating in this industry in the long run earns negative accounting profit. O True O False PRICE (Dollars per kilogram)
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