I have uploaded the picture of the entire problem. http://prntscr.com/1c5lp4 Con
ID: 1176844 • Letter: I
Question
I have uploaded the picture of the entire problem. http://prntscr.com/1c5lp4 Consider a perfectly competitive market for bushels of wheat. The graph below shows the cost curves for a typical firm in the industry. 7.2. Use the orange points (square symbol) on the graph below to plot the short-run industry supply curve for the wheat industry. Line segments will automatically connect the points. Remember to plot from left to right. Assume that there are 100 identical firms in the industry, all of which have the same cost curves as the ones shown on the graph above. Note that 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.Explanation / Answer
MC curve above the AVC is the supply curve. . now looking at the cost graph. . one firms supply is as follows
p q
5 3
10 4
20 5
30 6
40 7
50 firms supply is as follows
(multiply one firms qty by 50)
p q
5 150
10 200
20 250
30 300
40 350
100 firms supply is as follows
(multiply one firms qty by 100)
p q
5 300
10 400
20 500
30 600
40 700
when you will plot these two lines you will see when there were 50 firms the euilibrium p was 20 and q was 250
after there were 100 firms the equilibrium p is 10 and q is 400 where there is x in the demand graph
i hope it is easy now