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Unformatted text preview: f zero, or a normal profit.
9-14 INVISIBLE HAND WHEN FACING LOSSES Figure 9.5 A short-run economic loss in the apple market
At an equilibrium price of $1 per kilogram (a), the typical orchard earns an economic loss of $21 000
per year (b).
9-15 INVISIBLE HAND WHEN FACING LOSSES Figure 9.6 Equilibrium when growers cease exiting the apple market
Growers will cease to exit once price rises to the minimum value of ATC. At that point all growers
earn an economic profit of zero, or a normal profit.
9-16 LONG RUN SUPPLY IN A COMPETITIVE
! SR Supply curve for a profit maximising firm in a
competitive market is its MC curve ! LR adjustments can be made including firms entering...
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This note was uploaded on 03/12/2014 for the course ECON 1101 taught by Professor Julia during the Three '08 term at University of New South Wales.
- Three '08