Graphically depict the long-run graph for a purely competitive structure. Graphs and explanation required
Graphically depict the long-run graph for a purely competitive structure. Graphs and explanation required
Homework Answers
The long-run average total cost curve will be horizontal at the profit-maximizing condition because 5long-run profit-maximizing condition of perfectly competitive firm is
P=LRMC=LRATC
Since in perfect competition there is free entry and exit in long-run.
The LRAC is U shaped and LRMC cuts LRATC curve at its minimum point and LRATC curve is tangent on the price line.
As it can be seen in the diagram that LRMC, ATC curve and current price P are equal at this point and therefore profit-maximizing quantity in the long-run is Q* units.
All has been shown in the below diagram.
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Graphically depict the long-run graph for a purely competitive
structure. Graphs and explanation required
Graphically depict the long-run graph for a purely competitive structure. Graphs and explanation required.
Graphically depict the long-run graph for a purely competitive structure. Graphs and explanation required.
MC 0 Firm Industry The accompanying graphs are for a purely competitive market in the short run. The graphs suggest tha...
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The accompanying graphs represent the market for soybeans, a perfectly (purely) competitive market, and Roy's Soys, an individual firm in the market for soybeans. The market and the firm are currently in long-run equilibrium at point A. Soybean market Roy's Soys 20 20 Price 2 B Price 3T Short-run supply 18- 17 16 15 17 15 13 12 13 12 Average total cost ng-run supply Price 4 4 3- 3- Demand 0 1 2 3 4 5 67 8 9...
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