Consider a perfectly competitive market for wheat in Toronto. There are 90 firms in the industry, each of which has the cost curves shown on the following graph: Use the orange points (square symbol) to plot the short-run industry supply curve for the wheat industry. Specifically, place an orange point at thelowest 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 supplycurve 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 likethem connected. Line segments will connect the points automatically.) Then, place the black point (plus symbol) on the graph to indicate the short-runequilibrium price and quantity in this market. (Note: Dashed drop lines will automatically extend to both axes.)(?100Demand90Supply Curve807060Equilibrium5040302010450900 1350 1800 2250 2700 3150 3800 4050 4500QUANTITY (Thousands of bushels)At the current short-run market price, firms willin the short run. In the long run,v the marketgiven the current market price.PRICE (Cents per bushel) Consider a perfectly competitive market for wheat in Toronto. There are 90 firms in the industry, each of which has the cost curves shown on thefollowing graph:10090MC O807060ATC504030, 2530AVC20105101520253035404550OUTPUT (Thousands of bushels)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 thelowest 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 supplycurve that corresponds to prices where there is no output, since thisthe industry supply curve. Plot your points in the order in which you would likethem connected. Line segments will connect the points automatically.) Then, place the black point (plus symbol) on the graph to indicate the short-runequilibrium price and quantity in this market. (Note: Dashed drop lines will automatically extend to both axes.)COST (Cents per bushel)

We are going to find short run profit maximisation condition to answer this question.

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 10 450 900 1350 1800 2250 2700 3150 3600 4050 4500 QUANTITY (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 (Cents per bushel)

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 10 450 900 1350 1800 2250 2700 3150 3600 4050 4500 QUANTITY (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 (Cents per bushel)

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Perfect Competition

Section: Chapter Questions

Problem 15QP

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