7. Short-run supply and long-run equilibrium

Consider the 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 (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph.

\f80 72 Supply (10 firms) 64 56 48 Demand Supply (20 firms) PRICE (Dollars per pound) 40 32 Supply (30 firms) 24 16 CO 0 0 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Thousands of pounds)