Economics 1021A/B Lecture Notes - Demand Curve, Marginal Cost, Social Cost

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Published on 16 Nov 2011
School
Western University
Department
Economics
Course
Economics 1021A/B
Lec- Textbook-Chapter 12
Output, price and profit in the short run
short run equilibrium is where the market demand curve
intersects the market supply curve
a change in the demand brings a change in short run equilibrium
in the short run equilibrium a firm may break even, make an economic
profit, or incur an economic loss
output, price and profit in the long run
although the short run equilibrium, a firm may make an
economic profit, break even, or incur an economic loss, only one
of them is a long run equilibrium because the firms can enter of
exit the market
entry and exit
new firms enter an industry in which existing firms make an
economic profit
firms exit an industry in which they incur an economic loss
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