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Economics 10th Edition by William McEachern
Edition 10ISBN: 978-1133188124Economics 10th Edition by William McEachern
Edition 10ISBN: 978-1133188124 Exercise 14
PERFECT COMPETITION IN THE LONG RUN Draw the short-and long-run cost curves for a competitive firm in long-run equilibrium. Indicate the long-run equilibrium price and quantity.
a. Discuss the firm's short-run response to a reduction in the price of a variable resource.
b. Assuming that this is a constant-cost industry, describe the process by which the industry returns to long-run equilibrium following an increase of market demand.
a. Discuss the firm's short-run response to a reduction in the price of a variable resource.
b. Assuming that this is a constant-cost industry, describe the process by which the industry returns to long-run equilibrium following an increase of market demand.
Explanation
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Diagram for the competitive firm:
The b...
Economics 10th Edition by William McEachern
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