CENGAGE | MINDTAP Chapter 15 Homework Attempts | 1.7 Keep the Highest 1.7 / 4 7. Short-run supply and long-run equilibrium Consider the competitive market for rhodium. 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. (?) 60, 90 100 90 70 50 COSTS (Dollars per pound) ATC 30 AVC 10 MC O 10 20 30 40 50 60 70 90 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 -0- 90 80 Supply (10 firms) TO Supply (15 firms) PRICE (Dolars per pound) Supply (20 firms) Demand 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) If there were 20 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. Because you know that competitive firms earn economic profit in the long run, you know the long-run equilibrium price must be Iper 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. O True O FalseUse 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 90 Supply (10 firms) TO ED Supply (15 firms) 50 PRICE (Dolars per pound) 40 Supply (20 firms) Demand 30 20 10 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) If there were 20 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. Becaus earn zero profit titive firms earn economic profit in the long run, you know the long-run equilibrium price must be earn a positive profit be graph, you can see that this means there will be _ firms operating in the rhodium industry in long-run equilibrium. True of shut down fit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit. operate at a lossUse the orange points (square symbol) to plot the inbal 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 -0 Supply (10 fins) TO Supply (15 firms) 50 PRICE (Dolars par pound) 40 Supply (20 firms) Demand 8 20 0 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) If there were 20 firms in this market, the short-run equilibrium price of rhodium would be 5 per pound. At that price, firms in this industry would 7. Therefore, in the long run, firms would the rhodium market. Because you know that competitive firms earn_ economic prof enter how the long-run equilibrium price must be per pound. From the graph, you can see that this means there w exit g in the rhodium industry in long-run equilibrium. True or False: Assuming implicit costs are positive, each of the firms operatic neither enter nor exit long run earns negative accounting profit. O True O FalseUse the orange points (square symbol) to plot the inbal 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) 70 60 Supply (15 firms) PRICE (Dolars per pound) 40 Demand Supply (20 firms) 30 20 125 250 375 500 625 750 875 1000 1125 1250 QUANTITY (Thousands of pounds) If there were 20 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. 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 carf his means there will be _ firms operating in the rhodium industry in long-run equilibrium. negative True or False: Assuming implicit costs are posit positive the firms operating in this industry in the long run earns negative accounting profit. True zero O False580 572 564 556 Price($ per pound) 540 524 120 740 360 480 600 720 840 Quantity( thousands of pounds) Supply (10 Firms) Demand - - Equitrium -+ Supply[20 Firms)