BHP short and long-run supply

BHP short and long-run supply - Name: Bao Dang ID:...

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Name: Bao Dang ID: 16-867-498 BHP Billiton Net Soars in Short Run and Long Run According to Wall Street Journal, February 16, 2010, BHP Billiton Ltd. reported a 72 percent rise in its half-year net profit. Because of high profit created by high prices of raw materials, BHP and other miners will invest more in mining industry. The current high profit of BHP and its investing in capital to increase production can be explained by using the concept of short-run and long-run competitive supply. In the short run, the price of BHP’s core commodities increased because of a combination of strong market demand for industrial raw materials from recovered global economy and supply constraints. In the short run, the capitals of miners such as numbers of trucks, machines are fixed. Therefore, increasing in demand leads to increasing in price. At the short-run equilibrium, the market price is greater than average total cost. The economic profit of the company is positive. The long-run consequence of short-run economic profit is the intensive use of existing
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BHP short and long-run supply - Name: Bao Dang ID:...

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