Unformatted text preview: i. If you are given the MC for each unit and given the price, how do you find MB = MC? 1. Firms Marginal revenue = additional revenue by selling one extra unit of good 2. Therefore, P = Marginal Revenue = MB III. Terms a. Shutdowns i. If price goes below Shutdown point, it is called Temporary Shutdown b. Returns to Scale (See Lecture notes from October 17) c. External Economies and diseconomies of scale i. Long run supply curve is perfectly elastic ii. Exhibits no economies of diseconomies of scale iii. Growth of industry doesn’t foster technology improvements and doesn’t change the price of inputs 1. External E and D effect Long run INDUSTRY supply curves 2. Technology and factor prices are affected when firm expands or contracts?...
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- Fall '06