I need assistance with my economics assignment

2. Short-run supply and long-run equilibrium Consider the perfectly competitive market for steel. 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. 100 COSTS (Dollars per ton) 1 8 8 8 8 8 8 ATC 10 MCO AVC 5 10 15 20 25 30 35 40 45 50 QUANTITY OF OUTPUT (Thousands of tons) The following diagram shows the market demand for steel. Use the orange points (square symbol) to plot the short-run industry supply curve when there are 20 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 30 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 40 firms. 100 O 90 80 Supply (20 firms) 70 PRICE (Dollars per ton) 60 Supply (30 firms) 50 A 40 Demand Supply (40 firms) EARN ZERO 30 Profit OPERATE ATA 20 LOSS Shut Down 10 0 123 250 373 500 623 750 873 1000 1123 1250 QUANTITY OF OUTPUT (Thousands of tons) If there were 20 firms in this market, the short-run equilibrium price of steel would be per ton. At that price, firms in this industry would earn a positive profit . Therefore, in the long run, firms would ENTER the steel market. Zero Neither exit OR enter Positive Because you know that perfectly competitive firms earn_ NEGATIVe economic profit in the long run, you know the long-run equilibrium price must be per ton. From the graph, you can see that this means there will be 20-firms operating in the steel industry in long-run equilibrium. 40 True or False: Each of the firms operating in this industry in the long run earns positive accounting profit. True False