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Study Guide

MGEA02H3- Final Exam Guide - Comprehensive Notes for the exam ( 43 pages long!)


Department
Economics for Management Studies
Course Code
MGEA02H3
Professor
Michael Krashinsky
Study Guide
Final

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UTSC
MGEA02H3
Final EXAM
STUDY GUIDE

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1
MGEA02 - Week 9
This week:
- What defines long-run equilibrium in a
perfectly competitive market?
- What is different for the firm and the
industry in long-run equilibrium?
- Is perfect competition good for society
does it promote economic well-being
(i.e., economic welfare)?
- Graphic and algebraic examples of
shocksand movements to short and
long run equilibrium
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2
What is the short run?
- A period of time too short for firms to
change the amount of capital equipment
they are currently using.
- A period of time too short for new firms
to enter the industry or for existing
firms to permanently exit.
What is the long run?
- A period of time long enough so that the
firm can change its amount of capital
equipment so as to produce at the
lowest possible average cost
- A period of time long enough for firms
to enter or exit the industry in response
to profit or loss
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