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Lecture

Lecture14.pdf

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Department
Economics
Course
ECON 201
Professor
Corey Van De Waal
Semester
Fall

Description
dng emandown dids shut y expanwill b dfirm y consumerltheeman endddra thentu Ss exthiumiLRAVCrot ilibdmin hout altering their price some will raise try under consideration the market demand curve shifts to the rightP lar industry will make is determined by the ifPminLRAVCthenthefirmwillshutdownif responillong run equislLecture 14 es wis ill respond by lowering their pricerittn iusds in idecision hfor the specific induscve hititidown ry wtusclosed ny compeitlrun ecfer an longidperttheosonsThe Long Run Industry Supply CurvePerfect Competition in the Long Runthe long run output decision is LRMCMRPthelongrunclosedowndecisionisCididthihiiitlilibiSddlddCMtftltitiidtiilldtthitddbdiMWhich of these pricing decisions a particunature of the input costs output however some industries will do so wittheir price and other industries wfor the industrys product increases so that SXLRS CCICurve DSupply SLR BoffirmsDACShapeofLRSupplyCurveShapeindividual the of PP supply curve in the long run is simply the curves supply XLRMCrunConstant Cost IndustryHorizontalLRAClong theIncreasing Cost IndustryUpward Sloping Decreasing Cost IndustryDownward Slopingof summationCosts unchanged Costs rise Costs fallRepresentative FirmIndustry or MarketLets consider all three scenariosD Now remember that the market or industryhorizontalsummationofthelongrunsupplycurvesoftheindividualfirmshorizontal1Constant Factor CostsThe Constant Cost Industry CCIP CPC
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