Long run equilibrium - perfect competition, Microeconomics

Assignment Help:

Long run equilibrium - Perfect competition:

In the long-run, on the other hand, the firm in perfect competition is making normal profit or zero economic profit as shown in Figure below (total cost equal total revenue)

2005_Long run equilibrium - Perfect competition.png
Figure: The Long-run Equilibrium Position of the Perfectly Competitive Firm.


The existence of positive economic profit in the short-run serves as an incentive for new firms to join the industry, especially since there are no barriers to entry. The process of new entry will persist until the profit of each firm in the industry is competed out. That is, excess supply and continuous downward review of price to the level where price (P) equals average total cost (LAC) will engender zero economic or normal profit in the long-run.


Related Discussions:- Long run equilibrium - perfect competition

Describe trade unions and collusion among employees, Trade union can also p...

Trade union can also pay a useful role in improving the wages of the workers without causing adverse effects on employment. This case which is intensely associated with the idea of

Explain about capital flight, Q. Explain about Capital Flight? Capital ...

Q. Explain about Capital Flight? Capital Flight: A destructive process in that investors (both domestic residents and foreigners) withdraw their financial capital from a countr

TYPES OF POLLUTANTS , TYPES OF POLLUTANTS In general the air pollutants c...

TYPES OF POLLUTANTS In general the air pollutants can be sub divided into 2 catexampleories: Primary pollutants and Secondary pollutants Primary pollutants These are the poll

Economics for money, 1. Discuss how banks make money, and are structured in...

1. Discuss how banks make money, and are structured in respect to Asset, Liability and Capital Management – give examples.

What is the difference between capital and capital value, What is the diffe...

What is the difference between 'Capital' and 'Capital value'?   "The total amount of money or other resources owned or used to obtain future income or benefits." On the other h

Proportion of income spent for the commodity , All other things equivalent,...

All other things equivalent, the higher the proportion of income spent for the commodity more price elastic will be the demand.   Most home owners are recognizable with how this de

2nd year chapter 3, why s-block elements are powerful reducing agent?

why s-block elements are powerful reducing agent?

#title.demand and supply ., a. Determine Australia’s market equilibrium ...

a. Determine Australia’s market equilibrium for TV sets. i. (1) What are the equilibrium price and quantity?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd