A market is in long-run equilibrium and firms inthis market have identical cost structures. Supposedemand in this market decreases. Describe whathappens to the profit-maximizing output quantityfor individual firms as the market leaves and thenreturns to long-run equilibrium.
A market is in long-run equilibrium and firms inthis market have identical cost structures. Supposedemand in this market decreases. Describe whathappens to the profit-maximizing output quantityfor individual firms as the market leaves and thenreturns to long-run equilibrium.
Chapter9: Perfect Competition
Section: Chapter Questions
Problem 13QP
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Question
A market is in long-run equilibrium and firms in
this market have identical cost structures. Suppose
demand in this market decreases. Describe what
happens to the profit-maximizing output quantity
for individual firms as the market leaves and then
returns to long-run equilibrium.
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