If there were 10 firms in this market, the short-run equilibrium price of copper would be $___ per pound. At that price firms in this industry would (shut down / operate at a loss / earn zero profit / earn a positive profit). Therefore, in the long run firms would (enter / exit / neither enter nor exit) the copper market.
Because you know that competitive firms earn (positive / zero / negative) economic profit in the long-run equilibrium price must be $___ per pound. From the graph, you can see that this means there will be (10 / 20 / 30) firms operating in the copper industry in long-run equilibrium.
P | QS-10 | QS-20 | QS-30 |
20 | 240000 | 480000 | 720000 |
36 | 300000 | 600000 | 900000 |
44 | 320000 | 640000 | 960000 |
52 | 340000 | 680000 | 1040000 |
72 | 380000 | 760000 | 1140000 |
The firm will produce as long as P is equal to or above AVC.
Find the quantity supplied by a single firm by setting P=MC
Quantity supplied by 10,20 and 30 firms are shown in the table above
If there were 10 firms in this market, the short-run equilibrium price of copper would be $52 per pound. At that price firms in this industry would (earn a positive profit). Therefore, in the long run firms would (enter) the copper market.
Because you know that competitive firms earn ( zero) economic profit in the long-run equilibrium price must be $44 per pound. From the graph, you can see that this means there will be (20 ) firms operating in the copper industry in long-run equilibrium.
The last statement is True
Correction: Everything is correct besides the point (1020,52) for (QS-30,P)
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