MICROECONOMICS PRINCIPLES WITH ETHICSMODULE 13: Perfect Competition Theory - Part 2 Textbook Reading:Presentation Slides:Additional Useful Information:Deriving the Supply Curve Short-Run to the Long-Run |
OVERVIEWThis module demonstrates how the market supply curve is derived from the individual firms' marginal cost curves under the assumptions of perfect competition. We then consider the circumstances that would lead a firm to cease production and leave the market. Finally we examine the long-run market equilibrium that arises when new firms enter the market in response to positive profit, or exit the market following sustained losses. The long-run outcome results in zero economic profit accruing to the individual firms, which is just enough to sustain market participation.
VIDEO LECTUREDeriving the Short-Run Market Supply Curve - 17 minutes When Should a PC Firm Stop Producing? - 14 minutes Long-Run Adjustments in Perfect Competition - 23 minutes Deriving the Long-Run Market Supply Curve - 5 minutes
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