(Solved): 8. Short-run supply and long-run equilibrium Consider the perfectly competitive market for steel ...

8. Short-run supply and long-run equilibrium Consider the perfectly 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 \( (M C) \), average total cost \( (A T C) \), and average variable cost \( (A V C) \) curves shown on the following graph. The following diagram shows the market demand for steel. Use the orange points (square symbol) to plot the short-run industry supply curve when there are 10 firms in the market. (Hint: You disregard (diamond symbol) to plot the short-run industry supply curve when there are 20 firms. Finally, use the green points (triangle symbol) to plot short-run industry supply curve when there are 30 firms. If there were 20 firms in this market, the short-run equilibrium price of steel would be \( \quad \) per ton. At that price, firms in this industry would . Therefore, in the long run, firms would. the steel market. Because you know that perfectly competitive firms earn economic profit in the long run, you know the long-run equilibrium price must be per ton. From the graph, you can see that this means there will be firms operating in the steel industry in long-run equilibrium. True or False: Each of the firms operating in this industry in the long run earns negative accounting profit. True False