Econ Micro (book Only)
Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 8, Problem 13P

A

To determine

The short run response of a firm to a reduction in the price of a variable resource is to be determined.

Concept Introduction: Perfect competition has supply curve depicting the marginal cost curve which is higher than the average variable cost. Firms maximise their profits by producing at price = marginal cost.

B

To determine

The process by which the industry returns to long run equilibrium followed a change in market demand is to be determined.

Concept Introduction: Perfect competition has supply curve depicting the marginal cost curve which is higher than the average variable cost. Firms maximise their profits by producing at price = marginal cost.

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