- Zero profit does not mean that firm do not get anything to every unit work down.
- Equilibrium of producer in optimal scale of plant (Long-Ru Total Cost minimum and Long-Run Average Cost also minimum.
- Producers just produce normal profit, can not produce profit again.
An Increase in Demand
Increase demand support price is higher and more much profit
- Existing firm increase outpt
- New firm entries market, increase output continuous
- The price fall down until all profit be eroded.
- If the price of input ts constant new equilibrium will present in original price but output are higher.
- Original firms will be back in position original output , but the firm in market is too much, total output will increase.
- In the short run, price levels adjust, but in the long-run adaption is done by quantity.
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