What is the relationship between the long-run industry supply curve and the short-run supply curve in a perfectly competitive market?
The long-run industry supply curve evolves from the short-run supply curve. As new firms enter, the short-run supply curve shifts toward its long-run position. Also, as short-run fixed cost commitments become variable, the short-run cost curves become the long-run cost curve.
You might also like to view...
Shawn determines that if Lexall Corporation has high revenues, then Waters Corporation will have low revenues, and that if Lexall Corporation has low revenues, then Waters Corporation will have high revenues. Shawn buys stock in both corporations
a. He has reduced firm-specific risk but not market risk. b. He has reduced market risk, but not firm-specific risk. c. He had reduce both firm-specific risk and market risk. d. He has reduced neither firm-specific risk nor market risk.
James took out a fixed-interest-rate loan when the CPI was 200 . He expected the CPI to increase to 206 but it actually increased to 204 . The real interest rate he paid is
a. higher than he had expected, and the real value of the loan is higher than he had expected. b. higher than he had expected, and the real value of the loan is lower than he had expected. c. lower than he had expected, and the real value of the loan is higher than he had expected. d. lower then he had expected, and the real value of the loan is lower than he had expected.