H16LRCompetitiveMarket - Long Run Industry Supply 64 demand...

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1 LR – entry SR supply increases, equilibrium P , profit SR - equilibrium P , Q ; Firm Q with profit Long Run Industry Supply Long Run Industry Supply Market Q P D S A demand increases D (LR) S ´ 64 B P P Long Run Industry Supply Long Run Industry Supply LR industry supply curve perfectly elastic at P = min LRATC LR equilibrium P = min LRATC 64 Market Q P D S A D (LR) B P P demand increases SR - equilibrium P , Q ; Firm Q with profit LR – entry SR supply increases, equilibrium P , profit S C S LR LR – entry SR supply increases, equilibrium P , profit SR - equilibrium P , Q ; Firm Q with profit Market Q D S SR D A demand increases External Diseconomies of Scale 65 B P entry with growth in the industry, firm’s costs increase firm’s AVC, ATC, MC shift up S SR increases S SR P
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