2012.04.30 - ECON1101, Week 9 Lecture Notes

9 14 invisible hand when facing losses figure 95 a

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

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 MARKET !  SR Supply curve for a profit maximising firm in a competitive market is its MC curve !  LR adjustments can be made including firms entering...
View Full Document

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.

Ask a homework question - tutors are online