Consider the competitive market for rhodium. Assume that no matter how many firms operate in the industry, every firm is identical and faces thesame marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph.82 8807264COSTS (Dollars per pound)238168003MCATCOAVC006 9 12 15 18 21QUANTITY (Thousands of pounds)2427 30The following graph plots the market demand curve for rhodium.? The following graph plots the market demand curve for rhodium.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 candisregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use thepurple points (diamond symbol) to plot the short-run industry supply curve when there are 20 firms. Finally, use the green points (triangle symbol) toplot the short-run industry supply curve when there are 30 firms.PRICE (Dollars per pound)8072645648403224168to00Demand120 240 360 480 600 720 840 960 1080 1200QUANTITY (Thousands of pounds)Because you know that competitive firms earnSupply (10 firms)If there were 30 firms in this market, the short-run equilibrium price of rhodium would bewould. Therefore, in the long run, firms wouldSupply (20 firms)TrueSupply (30 firms)Falseper pound. From the graph, you can see that this means there will beper pound. At that price, firms in this industrythe rhodium market.economic profit in the long run, you know the long-run equilibrium price must befirms 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 positive accounting profit.

The supply schedule is given below:PriceQuantity supplied by single firmQuantity supplied by 10…

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. COSTS (Dollars per pound) 80 72 64 56 40 32 24 16 8 0 0 3 MC ATC 20 AVC 0 O 6 9 12 15 18 21 24 QUANTITY (Thousands of pounds) 27 30 The following graph plots the market demand curve for rhodium. ?

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. COSTS (Dollars per pound) 80 72 64 56 40 32 24 16 8 0 0 3 MC ATC 20 AVC 0 O 6 9 12 15 18 21 24 QUANTITY (Thousands of pounds) 27 30 The following graph plots the market demand curve for rhodium. ?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 3P

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