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Lecture+15+March+21

Lecture+15+March+21 - Today’s Agenda • Short-run supply...

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Unformatted text preview: Today’s Agenda • Short-run supply and the shut-down point • Long run industry equilibrium • Long run industry supply Exam: Wednesday, March 30 • Coverage: Chapters 9 through 14 • Oligopoly theory (chapter 15) will not be covered. • Review session: Tuesday, March 29, 8:45 p.m. Hickman 101 Today • Is the first full day of spring • Is the last day to withdraw from a course with a W grade. Q Q $/Q $ MR, AR PQ=TR P 1 P Revenue is proportional to Q for a perfect competitor The supply decision • Should the firm produce anything? • If so, what quantity should it produce? Q $ STC(Q) TR(Q) Q π (Q) $ Q* slope = MC(Q*) slope = MR(Q*) = P slope = 0 Q $ STC(Q) TR(Q) Q π (Q) $ Q* At Q*, MR = MC Q $ STC(Q) TR(Q) Q π (Q) $ MR = MC at π minimum, too Q' Q* in terms of MR, MC curves Q $/Q SMC MR P 1 Q* in terms of MR, MC curves Q $/Q SMC MR P 1 Q*(P 1 ) Q* in terms of MR, MC curves Q $/Q SMC Q*(P 2 ) MR P 2 MR P 1 Q* in terms of MR, MC curves MR P 2 Q $/Q SMC Q*(P 3 ) MR P 1 MR P 3 Q* in terms of MR, MC curves P 2 Q $/Q SMC P 1 P 3 Our story, with calculus ( ) ( ) ( ) ( ) ( ) ( ) 2 2 > ′ < − = = = − = − = − ⋅ = C SM dQ Q dSMC dQ d Q SMC P Q SMC P dQ d dQ Q dSTC P dQ d Q STC Q P Q π π π π Our story, with calculus ( ) ( ) ( ) ( ) ( ) ( ) 2 2 > ′ < − = = = − = − = − ⋅ = C SM dQ Q dSMC dQ d Q SMC P Q SMC P dQ d dQ Q dSTC P dQ d Q STC Q P Q π π π π Our story, with calculus ( ) ( ) ( ) ( ) ( ) ( ) 2 2 > ′ < − = = = − = − = − ⋅ = C SM dQ Q dSMC dQ d Q SMC P Q SMC P dQ d dQ Q dSTC P dQ d Q STC Q P Q π π π π Our story, with calculus ( ) ( ) ( ) ( ) ( ) ( ) 2 2 > ′ < − = = = − = − = − ⋅ = C SM dQ Q dSMC dQ d Q SMC P Q SMC P dQ d dQ Q dSTC P dQ d Q STC Q P Q π π π π Our story, with calculus ( ) ( ) ( ) ( ) ( ) ( ) 2 2 > ′ < − = = = − = − = − ⋅ = C SM dQ Q dSMC dQ d Q SMC P Q SMC P dQ d dQ Q dSTC P dQ d Q STC Q P Q π π π π Our story, with calculus ( ) ( ) ( ) ( ) ( ) ( ) 2 2 > ′ < − = = = − = − = − ⋅ = C SM dQ Q dSMC dQ d Q SMC P Q SMC P dQ d dQ Q dSTC P dQ d Q STC Q P Q π π π π Our story, with calculus...
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Lecture+15+March+21 - Today’s Agenda • Short-run supply...

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