CENGAGE | MINDTAP Q Search Homework (Ch 14) 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 BO 70 60 ATC 50 COSTS (Dollars) 40 30 ? 20 O AVC MC O OFMODO 4 Apr 12Homework (Ch 14) For every price level given in the following table, use the graph to determine the profit-maximizing quantity of jumpsuits for the firm. 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 firm is indifferent between producing zero jumpsuits and the profit-maximizing quantity of jumpsuits.) Lastly, determine whether the firm will earn a profit, incur a loss, or break even at each price. Price Quantity (Dollars per jumpsuit) (Jumpsuits) Produce or Shut Down? Profit or Loss? 15 20 Break even 25 55 Loss 70 Profit 85 On the following graph, use the orange points (square symbol) to plot points along the portion of the firm'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 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. ) MODO hpE 90 BO Firm's Short-Run Supply EI 60 PRICE (Dollars per jumpsuit) 50 40 30 20 10 10 130 40 50 60 70 80 QUANTITY (Thousands of jumpsuits) ? OEMDO hpSuppose there are 7 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. 100 Demand Industry's Short-Run Supply 80 .+ 70 Equilibrium 60 Dollars per jumpsuit 50 40 O hpHomework (Ch 14) Note: Dashed drop lines will automatically extend to both axes. E 100 08 Demand Industry's Short-Run Supply 80 EI 70 Equilibrium 60 50 PRICE (Dollars per jumpsuit) 40 30 20 10 70 140 210 280 350 420 490 560 630 700 ? QUANTITY (Thousands of jumpsuits) OFMOLO hp80 Industry's Short-Run Supply 70 -+ 60 Equilibrium PRICE (Dollars per jumpsuit) 50 40 30 20 10 0 0 70 140 210 280 350 420 490 560 630 700 QUANTITY (Thousands of jumpsuits) At the current short-run market price, firms will produce in the short run. In the long run, some firms will exit Grade It Now Save & Continue ? Continue without saving Oomework (Ch 14) 100 90 70 60 ATC COSTS (Dollars) 50 40 30 20 AVC MCO 10 10 20 30 40 50 60 70 BO 90 100 QUANTITY (Thousands of jumpsuits) O MODO