Econ 101 1st Edition Lecture 13Outline of Last Lecture II. Application #3III. Chapter 6: Perfect competitionIV. 9.1 Preview of the Four Market Structures in Chapter 9-12V. 9.2 The Firm’s Short-Run Output DecisionOutline of Current Lecture VI. 9.3 The Firm’s Shut-Down DecisionVII. 9.4 Short-Run Supply CurvesVIII. 9.5 The Long-Run Supply Curve For an Increasing-Cost IndustryIX. 9.6 Short-Run And Long-Run Effects of Changes in DemandCurrent LectureI. 9.3 The Firm’s Shut-Down Decisiona. Total Revenue, Variable Cost, and the Shut-Down Decisioni. Operate if total revenue > variable costii. Shut down if total revenue < variable costb. Shut-Down Price: the price at which the firm is indifferent between operating and shutting down; equal to the minimum average variable costII. 9.4 Short-Run Supply Curvesa. The Firm’s Short-Run Supply Curvei. Short-Run Supply Curve: A curve showing the relationship between the market price of a product and the quality of output supplied by a firm in the short runii. Short-Run Market Supply Curve: A curve showing the relationship between market price and the quantity supplied in the short runb. Market EquilibriumThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.i.III. 9.5 The Long-Run Supply Curve For an Increasing-Cost Industrya. Long-Run Market Supply Curve: A curve showing the relationship between the market price and quantity supplied in the long run. It is a plot of the low-points if successive ATC curves as firms enter the industryb. Increasing-Cost Industry: An industry in which the average cost of production increases as the total output of the industry increase: the long-run supply curve is positively slopedc. The average cost of production increases as the total output increases, for 2 reasons:i. Increasing input price: As an industry grows, it competes with other industries for limited amounts of various inputs, and this competition drives up the prices of these inputsii. Less productive inputs: A small industry will use only the most productive inputs, but as the industry grows, firms may be forced to use less productive inputsd. Production Cost and Industry Sizei.e. Examples of Increasing-Cost Industries: Sugar and ApartmentsIV. 9.6 Short-Run And Long-Run Effects of Changes in Demanda. The Short-Run Response to an Increase in
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