Below, the graph on the left shows the long-run average and marginal cost for a typical firm in a perfectly competitive industry. The graph on the right shows demand and long-run supply for the industry. LMC, LAC 40 LMC 40 35 LAC 30 VIX 25 20 15 35 30 25 20 15 10 5 0 I 100 200 300 400 500 Firm's output O $15; 250 O $15; 400 O $35; 250 9 O $35; 400 10 5 Industry output Long-run equilibrium occurs because of the entry of new firms into the industry or the exit of existing firms from the industry. In the above industry, long-run equilibrium occurs at a price of and output of P 0 S
Below, the graph on the left shows the long-run average and marginal cost for a typical firm in a perfectly competitive industry. The graph on the right shows demand and long-run supply for the industry. LMC, LAC 40 LMC 40 35 LAC 30 VIX 25 20 15 35 30 25 20 15 10 5 0 I 100 200 300 400 500 Firm's output O $15; 250 O $15; 400 O $35; 250 9 O $35; 400 10 5 Industry output Long-run equilibrium occurs because of the entry of new firms into the industry or the exit of existing firms from the industry. In the above industry, long-run equilibrium occurs at a price of and output of P 0 S
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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