attached is the graphs associated with this question any help would be appreciated.Long Run in a Perfectly Competitive Market
The graphs below depict the perfectly competitive market for apples on the left and Farmer John’s perception of the market for apples as an individual farmer on the right. Assume Farmer John’s costs are represented by SRATC-1. In the long run, will Farmer John choose a high, medium, or low level of capital for his farm? Indicate the SRATC curve associated with John’s decision. Explain what is going on in the short run for John’s apple farm (drawing a typical MC curve might be helpful).
Is the equilibrium price depicted here a long-run equilibrium? How do you know? If not, what will happen to move the market towards the long-run? Show the change the moves the market towards the long run equilibrium and label the long run equilibrium price, market quantity, and John’s long run quantity produced.
So I understand that the market is the price maker and that this graph must be in the short run because the demand and supply intersection do not seem to be equal with the lowest point on the lratc curve. but I am not sure about the other points like how to show the changes that move the market to the long run? or what about farmer john choosing a high med or low capital for his farm?
