The graph demonstrates that ten companies must be operating for the titanium industry to be in long-term equilibrium.
The short-run equilibrium price of titanium would be $15 per pound if there were 20 businesses competing in this market. Businesses in this sector would lose money at such pricing (The firm at this point is indifferent between shutting down and operating at a loss, the price though is less than the average cost, so firms earn or operate at a loss). Therefore, businesses would eventually stop selling titanium. You know the long-term equilibrium price must be $30 per pound since you are aware that competitive enterprises make no economic profit in the long run (price equals average cost). We can see from the graph that in order for the titanium industry to be in long-term equilibrium, there will be ten companies functioning there.
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COMPLETE QUESTION:
If there were 20 firms in this market, the short-run equilibrium price of titanium would be BLANK($) per pound. At that price, firms in this industry would (earn zero profit, shut down, operate at a loss, or earn a positive profit). Therefore, in the long run, firms would (enter, exit, neither enter nor exit) the titanium market.
Because you know that competitive firms earn (zero, positive, negative) economic profit in the long run, you know the long-run equilibrium price must be
BLANK ($) per pound. From the graph, you can see that there will be (10,15,20) firms operating in the titanium industry in long-run equilibrium.
