N21-monopoly jpw - End of Perfect Competition and on to...

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microL21-F2010-page http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ End of Perfect Competition and on to Monopoly Lecture 21 Dr. Jennifer P. Wissink ©2009 John M. Abowd and Jennifer P. Wissink, all rights reserved. November 9, 2010
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microL21-F2010-page http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Announcements: Micro S2010 MyEconLab: Two new quizzes have been posted. Quiz#09 and another ToCatchUpQuiz. Check the MEL site for due dates. Prelim 2: I hope it went reasonably well. TAs are busy grading – I hope to have results for you at lecture on Thursday.
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microL21-F2010-page http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ A Long Run Equilibrium Picture lratc q q* P* P* mr SRS w/N* D Q A a typical firm MARKET Note: Q* = N* times q* $ $
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microL21-F2010-page http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Long Run Market Supply in a Perfectly Competitive Market The long run market supply curve measures the quantities of a good or service offered for sale by all sellers--potential and actual--who could sell in the market. The long run market supply curve represents the market relationship between P* and Q* when the market is in long run equilibrium.
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microL21-F2010-page http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Getting the Long Run Market Supply Curve (Suppose An Increases in Demand) When demand increases and is expected to remain at the increased level, the short run response is to move along the short run supply curve--higher price and greater quantity supplied. The long run response is to have entry in the market, movement along the long run supply curve--price returns to the minimum average total cost and quantity supplied increases.
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microL21-F2010-page http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ NOW: Transition In The Market lratc q q* Q* P* P* mr=δ SRS w/N* D Q A a a typical firm THE MARKET Note: Q* = N* times q* $ $
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