2. Short run supply and long-run equilibrium Tools Consider the competitive market for steel. 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 35 100 30 00 COSTS (Dolars per 40 Sic 30 NO AVC 0 10 100 10 TO QUANTITY (Thousands of tone 100 10 - Supply (10) 70 00 Supply (15 firma) PRICE Dollars perfon 10 $ Demand Supply (20 fm) 30 20 10 0 125 3000 751000112120 QUANTITY (Thousands of font) If there were 15 firms in this market, the short run quarum price of steel would be Therefore, in the long run, firms would per ton. At that price, firms in this industry would the Meel market Because you know that competitive forms cam economic pront in the long run, you know the long run equilibrium price must be per ton. From the graph, you can see that this means there will be firms operating in the steel Industry in long-run equarium True or False Assuming implicit costs are positive, each of the firms operating in this industry in the long run earn negative accounting profit True O False Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 10 ms in the market. (Hint: You can dsregard 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 plet the short-run industry supply curve when there are 15 firms. Finally, use the green points (triangle symbol to plot the short run industry supply curve when there are 20 firme