Econ11Fall2007NotesForLecture_14Oct24

Econ11Fall2007NotesForLecture_14Oct24 - Lecture XIV Notes...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Lecture XIV Notes For October 24, 2007; I. Short Run Supply Decision of a Price-Taking Firm II. MARKET Supply Curves in the Short Run III. Effect of a Specific Tax on Short Run Supply IV. Long Run Total, Average & Marginal Cost Curves V. Relation Between Long and Short Run Cost Curves I. Short Run Supply Decision of a Price-Taking Firm A. Price = MC S ; Price > MC S , produce more Price < MC S , produce less B. Profit = TR – TC S on average-marginal diagram C. Shut down point at minimum of AVC Curve D. Firm supply = MC S curve above AVC II. MARKET Supply Curves in the Short Run A. Short run - new firms cannot enter the industry and existing firms have some inputs fixed. B. Add marginal cost curves of individual firms horizontally to form the market supply curve . C. Equating marginal cost at all producers - minimize cost of producing given output D. Now you know what is behind the supply curve of perfectly competitive industries 1. Perfect competition requires "price taking firms" 2. Supply has an important normative property -
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 3

Econ11Fall2007NotesForLecture_14Oct24 - Lecture XIV Notes...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online