ECO200Y1 Lecture Notes - Lecture 7: Minimum Railway Curve Radius, Economic Equilibrium, Demand Curve
violetprairie-dog339 and 52 others unlocked
32
ECO200Y1 Full Course Notes
Verified Note
32 documents
Document Summary
In short run, fixed capital prohibits entry/exit; existing firms adjust q in response to demand changes; the extent of changes in p determined by the mc. In long run, changes in demand can be responded by entry/exit; long-run price is all about costs (); long- run supply must be more elastic than short-run since the amount of capital is adjustable. Be reminded that economic modelling involves extreme assumptions and relaxing these assumptions. So large number of buyers and sellers that no individual firm or buyer cannot influence the price. It is generally easy for entry and exit. In the short-run, at least one factor of production fixed (usually capital). An individual firm produces x units of goods where. An individual firm produces the optimal quantity as long as the revenue at that q is at least as large as costs the firm can avoid (variable costs and non-sunk fixed costs).