@Mrdtap. Ceyage Learn. × -247680&nbNodeld;+778 75008&e; SBN-978 1285853161 #f&pa

Question

@Mrdtap. Ceyage Learn. × -247680&nbNodeld;+778 75008&e; SBN-978 1285853161 #f&parentid-77; Mind 4. Short-run supply and long-run equilibrium Consider the competitive market for steel. 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. 100 90 80 70 60 30 20 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Thousends of tons)

Explanation / Answer

1. $40

2. Positive Economic Profit

3. Enter

4. Zero Economic Profit

5. $30 as in long run will produce till P = MC = AC

6. 15 firms As at P = $30, each firm produces 40 units , so 15 firms will prodce 600 units which is equal to demand at P = $30

False

As each firm earns zero economic profit and positive accounting profits

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