7 Short-run supply and long-run equilibrium Consider the competitive market for steel

7 Short-run supply and long-run equilibrium Consider the 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 (MC), average total cost (ATC), and average variable cost (AVC) curves shown on the following graph. 80 T 72 64 56 ATC 40 32 24 16 AVC MCO 3 6 9 12 15 18 21 24 27 30 QUANTITY Thousands of tons) The following diagram shows the market demand for steel. Use the orange points (square symbo) to plot the initial short-run industry supply curve when there are 20 firms in the market. (Hint: You can disregard the portion of the supply curve that cornesponds to prices where there is no output since this is the industry supply curve.) Next, use the purple points (diamond symbo) to plot the short-run industry supply curve when there are 40 firms. Finally, use the green points (triangle symbo) to plot the short-run industry supply curve when there are 60 firms.