The following graph shows the market demand for wheat. Use the orange points (square symbol) to plot the short-run industry supply curve for the wheat industry. Specifically, place an orange point at the lowest point of the supply curve and another orange point at the highest point of the supply curve. (Note: You can disregard the portion of the supply curve that corresponds to prices where there is no output, since this is the industry supply curve. Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.) Then, place the black point (plus symbol) on the graph to indicate the short-run equilibrium price and quantity in this market. (Note: Dashed drop lines will automatically extend to both axes.) 100 Demand 90 Supply Curve 80 70 60 Equilibrium 50 40 30 20 10 650 1300 1950 2600 3250 3900 4550 5200 5850 6500 QUANTITY OF OUTPUT (Thousands of bushels) At the current short-run market price, firms will in the short run. In the long run, the market given the current market price. PRICE (C ents per bushel)
The following graph shows the market demand for wheat. Use the orange points (square symbol) to plot the short-run industry supply curve for the wheat industry. Specifically, place an orange point at the lowest point of the supply curve and another orange point at the highest point of the supply curve. (Note: You can disregard the portion of the supply curve that corresponds to prices where there is no output, since this is the industry supply curve. Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.) Then, place the black point (plus symbol) on the graph to indicate the short-run equilibrium price and quantity in this market. (Note: Dashed drop lines will automatically extend to both axes.) 100 Demand 90 Supply Curve 80 70 60 Equilibrium 50 40 30 20 10 650 1300 1950 2600 3250 3900 4550 5200 5850 6500 QUANTITY OF OUTPUT (Thousands of bushels) At the current short-run market price, firms will in the short run. In the long run, the market given the current market price. PRICE (C ents per bushel)
Chapter23: Profit Maximization
Section: Chapter Questions
Problem 1E
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Transcribed Image Text:The following graph shows the market demand for wheat.
Use the orange points (square symbol) to plot the short-run industry supply curve for the wheat industry. Specifically, place an orange point at the
lowest point of the supply curve and another orange point at the highest point of the supply curve. (Note: You can disregard the portion of the supply
curve that corresponds to prices where there is no output, since this is the industry supply curve. Plot your points in the order in which you would like
them connected. Line segments will connect the points automatically.) Then, place the black point (plus symbol) on the graph to indicate the short-run
equilibrium price and quantity in this market. (Note: Dashed drop lines will automatically extend to both axes.)
100
Demand
90
Supply Curve
80
70
60
Equilibrium
50
40
30
20
10
650
1300 1950 2600 3250 3900 4550 5200 5850 6500
QUANTITY OF OUTPUT (Thousands of bushels)
At the current short-run market price, firms will
in the short run. In the long run,
the market
given the current market price.
PRICE (C ents per bushel)
Transcribed Image Text:Consider a perfectly competitive market for wheat in New York City. There are 130 firms in the industry, each of which has the cost curves shown on
the following graph:
100
90
MC
80
70
60
ATC
50
40
30
AVC
20
10
5 10 15 20 25 30
35
40
45
50
QUANTITY OF OUTPUT (Thousands of bushels)
COST(Cents per bushel)
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