how do we get different outcomes in the short-run and long-run in the perfectly competitive market...
how do we get different outcomes in the short-run and long-run in the perfectly competitive market of agriculture?
Homework Answers
This is because of free entry and exit of firms in the short run and long run.
When there are positive economic profits in the short run, many new firms start entering the market to make profits and thus as a result of entering the market increase the supply and end up bringing down the profits to 0.
Similarly, in case of negative economic profits in short run, firms exit the market because of losses, which ends up reducing the supply curve and this leads to an increase in price and profits coming to 0 from negative.
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how do we get different outcomes in the short-run and long-run
in the perfectly competitive market...
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6. Short-run perfectly competitive equilibrium Consider a perfectly competitive market for wheat in Philadelphia. There are 80 firms in the industry, each of which has the cost curves shown on the following graph: MC ATC COST (Cents per bushel) AVC 0 5 10 15 20 25 30 35 40 45 50 Demand Supply Curve Equilibrium PRICE (Cents per bushel) 0 400 800 1200 1600 2000 2400 2800 3200 3600 4000 QUANTITY OF OUTPUT (Thousands of bushels) in the short run....
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cardboard boxes are produced in a perfectly competitive market. each identical firm has a short run...
cardboard boxes are produced in a perfectly
competitive market. each identical firm has a short run total cost
curve of TC= 3Q^3 - 12Q^2 +16Q + 100, where Q is measured in
thousands of boxes per week. calculate the output for the price
below which a firm in the market will not produce any output in the
short run. ( i.e., the output for the shut down price)
a 2^1/2
b. 2
c. 1/2
d. 1/square root of 2
2)...
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In the long run, a firm in a perfectly competitive market earns zero economic profit, so the opportunity in the short run to enjoy positive economic profits will cause existing firms to increase output and new firms to enter the market.
cardboard boxes are produced in a perfectly
competitive market. each identical firm has a short run total cost
curve of TC= 3Q^3 - 12Q^2 +16Q + 100, where Q is measured in
thousands of boxes per week. calculate the output for the price
below which a firm in the market will not produce any output in the
short run. ( i.e., the output for the shut down price)
a 2^1/2
b. 2
c. 1/2
d. 1/square root of 2
2)...
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