Economics: Private and Public Choice (MindTap Course List)
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 22, Problem 2CQ
To determine

The changes of market price in the long run.

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Give an example of a price at which this firm would want to produce and sell output in the short run, but not in the long run.
Firms in a perfectly competitive market are said to be "price takers" - that is, once the market determines an equilibrium price for the product, firms must accept this price.   If you sell a product in a perfect competitive market, but you are not happy with its price, would you raise the price, even by a cent?
In the long run, perfectly competitive firms make zero economic profit. If this is the case, why does the firm even bother producing? Why not exit the market completely?
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