supply demand curves of short term market shifts for perfect competition

I would wanna put my resources into this market so that I can make that positive economic profit as well.

Includes opportunity cost, so a lot of you will say hey, If folks see other folks makingĪ positive economic profit, remember, economic profitĭoesn't just account for regular cost, it also Now, that's in the short run,īut now let's think about what will likely happen in the long run.

Times the number of units, so the area of this rectangle is that positive economic Get this much per unit and then you multiply, so the height is how much you get per unit and then you multiply that Is the average total cost, that is your marginal revenue, and so you are going to And the way that we can see that is at this quantity, this And as we've talked about in other videos, at that quantity, they're going So for this firm at thisĬurrent state of affairs, it would be rational for them to produce this quantity right over there.

Higher than the marginal cost up to including when the marginal revenue is equal to the marginal cost. Quantity to produce, but it would be rationalįor them to keep producing while the marginal revenue is So they're not going to set the price, but they can choose what Price right over here, marked with this a dotted line, and as we've talkedĪbout in multiple videos, the firms in that perfectlyĬompetitive market, the perfectly competitive firms, they just have to price takers, so the market price is going to be their marginal revenue curve. Multiple times already, is our supply and our demand curves for our perfectly competitive market, and you can see the equilibrium So what we have on the left-hand side, and we've seen this Perfectly competitive markets in the long run. Dig a little bit deeper into what happens in

Supply demand curves of short term market shifts for perfect competition