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7. Short-run supply and long-run equilibrium Consider thecompetitive market for ruthenium. Assume that no matter how manyfirms operate in the industry, every firm is identical and facesthe same marginal cost (MC), average total cost (ATC), and averagevariable cost (AVC) curves plotted in the following graph.03691215182124273080726456484032241680COSTS (Dollars perpound)QUANTITY (Thousands of pounds)MCATCAVC8, 4 The followinggraph plots the market demand curve for ruthenium. Use the orangepoints (square symbol) to plot the initial short-run industrysupply curve when there are 10 firms in the market. (Hint: You candisregard the portion of the supply curve that corresponds toprices where there is no output since this is the industry supplycurve.) Next, use the purple points (diamond symbol) to plot theshort-run industry supply curve when there are 20 firms. Finally,use the green points (triangle symbol) to plot the short-runindustry supply curve when there are 30 firms. Supply (10firms)Supply (20 firms)Supply (30firms)01202403604806007208409601080120080726456484032241680PRICE(Dollars per pound)QUANTITY (Thousands of pounds)Demand1200, 52 Ifthere were 30 firms in this market, the short-run equilibrium priceof ruthenium would be per pound. At that price, firms in thisindustry wouldearn zero profit ??. Therefore, in the longrun, firms wouldneither enter nor exit ??the rutheniummarket. Because you know that competitive firms earnzero??economic profit in the long run, you know the long-runequilibrium price must be per pound. From the graph, you can seethat this means there will be30 ??firms operating in theruthenium industry in long-run equilibrium. True or False: Assumingimplicit costs are positive, each of the firms operating in thisindustry in the long run earns positive accounting profit. TrueFalse

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