Question

Suppose five years from now that the ranching industry is in long-run equilibrium at 70 cents per pound.
Graphically illustrate what that would look like for the ranching industry using side-by-side industry and firm graphs.

Answer 1

Use the graphing information and data provided in the previous lesson to complete this activity. You will need to include both an industry (total market) and a firm (individual business) graph for each question. On the firm graphs, you will need to illustrate demand (d), marginal revenue (MR), marginal cost (MC), average variable cost (AVC), and average total cost (ATC). When you don’t have exact data for a curve, you can still create the curve in relationship to the other curves on the graph. Use the graphs from Lesson 03.04 and Lesson 03.05 to help you construct the shapes and intersections/shifts of your graphs.

Answer 2

The 1st long-run graph should just be the same graphs EXCEPT the ATC moves up to hit the MR=D line. The AVC should move up as well since the variable costs are what's shifting the ATC and AVC curves not the fixed costs. For the 2nd long-run graph, it should be similar to the 1st long-run graph. Im not sure how the 2 long-run graphs differ however.

Answer 3

can you please show me

Answer 4

cuz i tried to do it but it came out really bad

Answer 5

@jazzy098

Answer 6

In the shortrun, the costs for the individual firm are going to decrease. The price will not change, but due to lower input costs, the individual firm will enjoy higher profits. The industry has not had enough time to react to the decreased input costs.

2b: In the longrun, firms get competitive. With the decreased input costs, firms can now compete to offer MORE animal feed at a LOWER price than other firms. Recall that in the longrun, there are 0 profits for the individual firm (and so marginal cost = price)