Question

7. Short-run supply and long-run equilibrium Consider the competitive market for copper. 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. COSTS (Dollars per pound) ATC + MC O AVC 0 + 0 + 5 + + + + 10 15 20 25 30 35 40 QUANTITY (Thousands of pounds) + 45 50
I just wanted to have someone check if this is correct, also the last picture of the table is what I tried to plug into the graph but the system is skipping over the numbers I need to plug in when I put my mouse over it so I'm afraid it may be incorrect. pls help, thank you!

Answer 1

The firm set P=MC to find the quantity and it does not produce when the price is below its minimum AVC

P	QS-1 FIRM	QS-20 FIRMS	30 FIRMS	40 FIRMS
10	0	0	0	0
15	15000	300000	450000	600000
30	20000	400000	600000	800000
40	22500	450000	675000	900000
70	27500	550000	825000	1100000
90	30000	600000	900000	1200000

Supply (20 firms) Supply (30 firms) PRICE (Dollars per pound) Supply (40 firms) Demand 0 125 1125 1250 250 375 500 625 750 875 1000 QUANTITY (Thousands of pounds)

Blanks-

1) 40

2) positive profits

3) enter

4) zero

5) 30

6) 40

The statement is True