Perfectly competitive firm-industry in long-run equilibrium

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Reference no: EM13801630

Draw graphs showing a perfectly competitive firm and industry in long-run equilibrium.

a. How do you know that the industry is in long-run equilibrium?

b. Suppose that there is an increase in demand for this product. Show and explain the short-run adjustment process for both the firm and the industry.

c. Show and explain the long-run adjustment process for both the firm and the industry. What will happen to the number of firms in the new long-run equilibrium?

Please post graphs and explain.

Reference no: EM13801630

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