Consider the competitive market for rhenium. 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. PRICE (Dollars per pound) COSTS (Dollars per pound) 8 8 8 8 100 90 80 70 60 50 40 30 100 20 90 10 0 70 50 20 10 The following graph plots the market demand curve for rhenium. 0 0 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. MCD 0 5 ATC AVC □ 0 10 15 20 25 30 35 QUANTITY (Thousands of pounds) Demand 40 45 50 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) (?) 0 Supply (10 firms) Supply (20 firms) Supply (30 firms)

Consider the competitive market for rhenium. 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. PRICE (Dollars per pound) COSTS (Dollars per pound) 8 8 8 8 100 90 80 70 60 50 40 30 100 20 90 10 0 70 50 20 10 The following graph plots the market demand curve for rhenium. 0 0 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. MCD 0 5 ATC AVC □ 0 10 15 20 25 30 35 QUANTITY (Thousands of pounds) Demand 40 45 50 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) (?) 0 Supply (10 firms) Supply (20 firms) Supply (30 firms)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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