# The short run industry curve is obtained by

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The short-run industry curve is obtained by multiplying the amount that each firm produces by the number of firms in the industry. For example, at a price of \$6.00, each firm would produce 30,000 pounds of copper per day. Therefore, 20 firms would supply a total of 600,000 pounds at that price, 30 firms would supply a total of 900,000 pounds, and 40 firms would supply a total of 1,200,000 pounds. To construct the rest of the supply curves, you should perform similar calculations at prices of \$1.50, \$2.50, \$4.00, and \$9.00 per pound. If there were 40 firms in this market, the short-run equilibrium price of copper would be \$4.00 " per pound. At that price, firms in this industry would operate at a loss" . Therefore, in the long run, firms would exit " the copper market. ExpLanation: Close A. The short-run industry supply curve with 40 firms intersects the demand curve at a price of \$4.00 per pound of copper. At this price, each firm would produce 25,000 pounds of copper per day at an average total cost of just over \$6.00 per pound. Because firms in this industry could sell that copper at \$4.00 per pound, they would make just over -\$2.00 per pound x 25,000 pounds = \$50,000 of loss per day. This negative profit would encourage other firms to exit the copper industry, shifting the supply curve to the left and raising the price of copper until it reaches its long-run equilibrium price.
Becauseyou know that perfectly competitive firms earn zero.., profit in the long run, you know the long-run equilibrium price must be \$6.00 " 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.
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