Question

Consider the competitive market for dress shirts. The following graphic shows the marginal cost (MC), average total cost (ATC) , and average variable cost (AVC) curves for a typical industry

 For each price in the following table, use the graph to determine the number of shirts this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is Indifferent between producing zero shirts and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price.

 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: You are given more points to plot than you need.)

 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: You are given more points to plot than you need.) Then, 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.

At the current short-run market price, firms will _______  in the short run. In the long run _______ .

Answer 1

Upward sloping MC curve is the supply curve of firm.

No. of firms are missing to find Industry's short run supply.