Question: Long run competitive equilibrium exists when P = MC = SRATC = LRATC. 1. State the conditions that characterize long-run competitive equilibrium. 2. Explain what

Long run competitive equilibrium exists when P = MC = SRATC = LRATC.
1. State the conditions that characterize long-run competitive equilibrium.
2. Explain what will happen if price is above or below short-run average total cost in a perfectly competitive industry.
3. Explain why perfectly competitive firms achieve productive efficiency in the long run.

Step by Step Solution

★★★★★

3.34 Rating (169 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

1 The conditions that characterize longrun competitive equilibrium ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

788-B-E-M-E (6682).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

In exercise 27.3, we considered some ways in which we can differentiate between goods that lie in between the extremes of pure private and pure public goods. A: Consider the case where there is a...

In long-run competitive equilibrium, P = MC = SRATC = LRATC. Because P = MR, we can write the preceding condition as P = MR = MC = SRATC = LRATC. The condition thus consists of four parts: (a) P =...

The long-run average cost for production of hard-disk drives is given by AC(Q) = wr(12020Q + Q2), where Q is the annual output of a firm, w is the wage rate for skilled assembly labor, and r is the...

3. Perfect Competition Market (Total 8 points) a. For a perfectly competitive firm, illustrate a case where the firm is facing P = MC = SRATC = LRATC by using the following diagram. In this diagram,...

The following questions are of micro economics. Please help me with better understanding. 2. You have collected the following data on output and total variable costs: \" m m m a. b. Identify the...

I need help with problem 2,3,4 and the extra credit please! 2. Your firm produces soccer balls and its labor productivity is shown below. Q Soccer balls 1500 1000 > 500 MP AP Q labor 5 10 15 20 25 a....

Explain the following attachments. A1. Assume that Canada is an importer of televisions and that there are no trade restrictions. Canadian con- sumers buy 1 million televisions per year, of which 400...

Plz answer the following 3 mcqs and 1 frq 13, Rice is produced in a perfectly competitive industry. Grand Farm is a typical rm in the rice industry earning a positive economic prot. a. Using...

Plz answer the following frq. This question requires graphing. Better off provide a digital version of the answer rather than a handwriting one. If a digital answer is not available, then plz offer...

Need these solved Case Study # 4: Perfect Competition (35 pts total) Please write answers in this Word document in red.Please be sure any graphs are imbedded in the document for the appropriate...

Given the strains: xx = 2,000 yy = 3,000 zz = 4,500 xy = 200 yz = 300 zx = 225 Where x = east, y = north, z = up, compression is positive, the units are micro inches per inch, Youngs modulus E =...

A firm's next dividend is expected to be $2.00. Dividends are expected to decrease by 3% in perpetuity. What is the firm's stock price if the required return is 10%?

Is concern for the environment a normal good? Discuss in the context of the destruction of rain forests in particularly poor parts of the world.

A new agile team member has joined from a traditional project background. She is coached by you as the team facilitator about her use of the term stakeholder. What is your counsel? A. In agile...

Seneca Hill Winery recently purchased land for the purpose of establishing a new vineyard. Management is considering two varieties of white grapes for the new vineyard: Chardonnay and Riesling. The...

The Lake Placid Town Council decided to build a new community center to be used for conventions, concerts, and other public events, but considerable controversy surrounds the appropriate size. Many...

Hemmingway, Inc., is considering a $5 million research and development (R&D) project. Profit projections appear promising, but Hemmingways president is concerned because the probability that the R&D...

* ON PAPER WORKING OUT The second product Suzie represents is an annuity. The customers of this product are typically retirees that use their retirement savings to buy a steady income stream. Like...

You own a one-year European call option to buy one acre of Los Angeles real estate. The exercise price is $2.05 million, and the current, appraised market value of the land is $1.75 million. The land...

A join in which the joining condition is based on equality between values in the common columns is called