Unformatted text preview: and exiting the market ! What is the MC of producing additional output in the LR?
9-17 LONG-RUN SUPPLY CURVE FOR APPLES Figure 9.7 Long-run equilibrium in an apple market with constant long-run average cost
When each producer has the same ATC curve, the industry can supply as much or as little output as
buyers wish to buy at a price equal to the minimum value of ATC (a). At that price, the representative
producer earns zero economic profit (b).
9-18 INVISIBLE HAND AT WORK Figure 9.9 The short-run effect of demand shifts in two markets
The decline in demand for film processing causes the price per film to fall from $15 to $12 in the short run (a),
while the increase in demand for personal fitness instruction causes the price of a fitness session to rise from
$10 to $15...
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