7. Short-run supply and long-run equilibrium Consider the competitive market for ruthenium. 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. 100 90 80 70 60 50 COSTS (Dollars per pound) 40 ATC 30 20 10 MC AVC 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousands of pounds)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 15 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 20 firms. 100 Supply (10 firms) 80 60 Supply (15 firms) PRICE (Dollars per pound) Supply (20 firms) Demand 20 10 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) If there were 10 firms in this market, the short-run equilibrium price of ruthenium would be | $ per pound. At that price, firms in this industry would . Therefore, in the long run, firms would the ruthenium market. Because you know that competitive firms earn economic profit in the long run, you know the long-run equilibrium price must be S per pound. From the graph, you can see that this means there will be _ firms operating in the ruthenium industry in long-run equilibrium.Step No: 2 Now, by plotting these points of supply schedule , we get 820, 830 and S40 , as shown below : Price (Dollars per ton) Quantity (Thousands of tons) Explanation: Equilibrium occurs when demand equals supply. Here, for different market supply ,there is a different market equilibrium