6. Deriving the short-run supply curve The following graph plots the marginal cost (MC) curve, average total cost (ATC) curve, and average variable cost (AVC) curve for a firm operating in the competitive market for jumpsuits. 100 90 80 70 60 ATC COSTS (Dollars) 50 40 30 20 AVC 10 MC O 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of jumpsuits)For every price level given in the following table, use the graph to determine the prot-maximizing quantity of jumpsuits for the rm. Further, select whether the firm will choose to produce, shut down, or be indifferent between the two in the short run. (Assume that when price exactly equals average variable cost, the rm is indifferent between producing zero jumpsuits and the prot-maximizing quantity of jumpsuits. ) Lastly, determine whether the firm will earn a prot, incur a loss, or break even at each price. Price Quantity (Dollars per jumpsuit) (Jumpsuits) Produce or Shut Down? Profit or Loss? 10 V V V 20 V V V 32 V V V 40 V V V 50 V V V 60 V V V On the following graph, use the orange points (square symbol) to plot points along the portion of the rm's shortrun supply curve that corresponds to prices where there is positive output. (Note: For the graphing tool to grade correctly, you must plot the points in order from left to right, starting with the point closest to the origin. You are given more points to plot than you need.) /'\\, K? 100 -- 80 __ Firm's Short-Run Supply 70 so 50 40 30 -- PRICE (Dollars per jumpsuit) 20 -- 10 o 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of jumpsuits) Suppose there are 9 firms in this industry, each of which has the cost curves previously shown. On the following graph, use the orange points (square symbol) to plot points along the portion of the industry's short-run supply curve that corresponds to prices where there is positive output. (Note: For the graphing tool to grade correctly, you must plot these points in order from left to right, starting with the point closest to the origin. You are given more points to plot than you need.) Next, place the black point (plus symbol) on the graph to indicate the short-run equilibrium price and quantity in this market. Note: Dashed drop lines will automatically extend to both axes. /'\\ K?) 100 Demand El 90- 80 __ Industry's Short-Run Supply I 70 1' 60 __ Equilibrium 50 - 4o -- 30- PRICE (Dollars per jumpsuit) 20 -- 10- 0 I I I I I I I I I I 0 45 90 135 180 225 270 315 360 405 450 QUANTITY (Thousands of jumpsuits) At the current short-run market price, firms will V in the short run. In the long run, V