N19-srs and SRS jpw (2)

Jonathans short run supply curve so in

This preview shows pages 11–16. Sign up to view the full content.

Jonathan’s Short Run Supply Curve So, in general, for a perfectly competitive firm, the srs firm = srmc for all points where srmc ≥ sravc (assuming all fixed costs are sunk).

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
microL19-F2010-page1 The Short Run Market Supply Curve The market supply curve is the horizontal sum of the quantities supplied by each seller at each market price. Market supply, thus reflects the marginal costs of each of the producers in the market.
microL19-F2010-page1 Individual Producer’s Surplus Recall: Producer’s surplus measures the gain to the firm from selling all units at the market price. Marginal Producer’s Surplus on a given unit (the qth) is: Price – Marginal Cost for that unit. Producer’s Surplus on all units supplied (q units) is: Total Revenue – Variable Costs. Producer’s Surplus is: the area above the short run firm supply curve and below the market price Producer’s Surplus is: Economic Profit + Fixed Costs.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
microL19-F2010-page1 Jonathan’s Producer’s Surplus Jonathan’s individual producer’s surplus when the market price is \$528 , is the sum of his economic profits (\$27,600) and his fixed costs (\$25,600) = \$53,200 . total revenue (\$121,440) minus variable costs (\$68,240) = \$53,200 .
microL19-F2010-page1

This preview has intentionally blurred sections. Sign up to view the full version.

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

{[ snackBarMessage ]}

What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern