Econ 101 Winter 2010 Lecture 25

Econ 101 Winter 2010 Lecture 25 - Economics 101...

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Click to edit Master subtitle style Lecture 1 Economics 101 Microeconomics University of Michigan Winter 2010 Lecture 25
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Lecture 1 22 Available on Ctools tomorrow Answer key will also be provided No discussion sections this week Reading Problem Set 14
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Lecture 1 Industry Equilibrium Long run equilibrium will imply: 1. Individual firms maximize profits n P = MC 2. Marginal firm earns zero profits n P = AC Marginal firm must produce at minimum AC n MC = AC & AC is at a minimum If all firms have access to the same technology, then all firms produce at minimum AC
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Lecture 1 Dynamics in the competitive AC, MC ($) AC MC Min AC P Q q P 0 SL R D Q0 q0 SSR PS R qSR QSR Short run profits Q1
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Lecture 1 Dynamics in the competitive AC, MC ($) AC MC Min AC P Q q P 0 SL R D Q0 q0 SSR P1 QSR qSR Short run losses Q1
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Lecture 1 Supply shocks How does the competitive market respond to supply shocks? n
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This note was uploaded on 04/20/2010 for the course ECON 101 taught by Professor Gerson during the Winter '08 term at University of Michigan.

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Econ 101 Winter 2010 Lecture 25 - Economics 101...

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