Question

6. Deriving the short-run supply curve Consider the competitive market for halogen lamps. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. COSTS (Dollars) AVC МСП OHH 0 10 90 100 20 30 40 50 60 70 80 QUANTITY (Thousands of lamps)

Answer 1

P	QS-SINGLE FIRM	QS-7 FIRMS
15	0	0
20	0	0
25	45000	315000
55	60000	420000
70	65000	455000
85	70000	490000

Firm's Short-Run Supply PRICE (Dollars per lamp) + 0 10 90 100 20 30 40 50 60 70 80 QUANTITY (Thousands of lamps)

Blanks-

Demand Industry's Short-Run Supply Equilibrium PRICE (Dollars per lamp) 0 70 630 700 140 210 280 350 420 490 560 QUANTITY (Thousands of lamps)

1) produce

2) firms will neither enter nor exit