Chapter 15 Homework The following graph plots the market demand curve for rhodium udy Tools 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 20 firms. Finally, use the green points (triangle symbol) to s Tips plot the short-run industry supply curve when there are 30 firms. Tips YOU N . Supply (10 firms) Demand Supply (20 firms) PRICE (Dollars per pound A Supply (30 firms) 0 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Thousands of pounds) If there were 10 firms in this market, the short-run equilibrium price of rhodium would be $ per pound. At that price, firms in this industry MacBook Air 8 4 0 2 + - O 89 LO O # m O 3 . . . - I LL V V Z O X N command option option commandQ Search this cou Chapter 15 Homework udy Tools Supply (10 firms) ess Tips Demand Supply (20 firms) PRICE (Dollars per pound A ss Tips Supply (30 firms) YOU O ts of 0 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Thousands of pounds) If there were 10 firms in this market, the short-run equilibrium price of rhodium would be $ per pound. At that price, firms in this industry would . Therefore, in the long run, firms would the rhodium market. dback Because you know that competitive firms earn economic profit in the long run, you know the long-run equilibrium price must be per pound. From the graph, you can see that this means there will be _ firms operating in the rhodium industry in long-run equilibrium True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit. True False MacBook Air + - O * OO 89 LO O # m ww O S . . J I LL V Z X N command option option command. . 8 mand O O 96 * OO Z Consider the competitive market for rhodium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the I MacBook Air 40 same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. 89 LO QUANTITY (Thousands of pounds) LL MC O The following graph plots the market demand curve for rhodium. 8 12 EA 7. Short-run supply and long-run equilibrium 4 8 O # m Chapter 15 Homework COSTS (Dollars per pound) X 3 N Tools