?The competitive firm’s long-run supply curveis the portion of its LMCcurve that lies above the minimumpoint of LAC.
汪艳
经济管理学院
双语教学示范课程
332013-7-23
?The process of entry and exit endsonly when price and AC are driven to equality.
?At the end of the process of entry and exit, firms that remain must be making zero economic profit.?Long-run equilibrium must have firms operating at their efficient scale.
汪艳
经济管理学院
双语教学示范课程
342013-7-23
?Why do competitive firms stayin business if they make zero profit??Profit equals TR minus TC.
?TC includes all the opportunity costs of the firm.?In the zero-profit equilibrium, the firm’s revenue compensates the owners for the time and money they expend to keep the business going.
汪艳
经济管理学院
双语教学示范课程
352013-7-23
The Long Run: Market Supplywith Entry and Exit
?Firms will enter or exit the market until profitis driven tozero.
?In the long run, Pequals the LACmin.?The long-run market supply curve is horizontalat this price.
汪艳
Why?经济管理学院
双语教学示范课程
362013-7-23
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