You are a business manager working for a firm in a purely competitive market and you just hired a summer intern who does not understand how to derive the firms’ short run supply curve from the firms’ marginal cost curve. a)Please explain to the intern how the short run supply curve is derived from the firm’s marginal cost curve. Be specific. b.) Please explain to the intern the characteristics of long run equilibrium of a purely competitive firm and how operating in a purely competitive market might impact the decision-making of the firm. Please include the implications of long-run equilibrium for productive and allocative efficiency. Please include the 3 assumptions, as well as the implications for economic profit, productive efficiency and allocative efficiency.
You are a business manager working for a firm in a purely competitive market and you just hired a summer intern who does not understand how to derive the firms’ short run supply curve from the firms’ marginal cost curve. a)Please explain to the intern how the short run supply curve is derived from the firm’s marginal cost curve. Be specific. b.) Please explain to the intern the characteristics of long run equilibrium of a purely competitive firm and how operating in a purely competitive market might impact the decision-making of the firm. Please include the implications of long-run equilibrium for productive and allocative efficiency. Please include the 3 assumptions, as well as the implications for economic profit, productive efficiency and allocative efficiency.
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter8: An Introduction To Perfect Competition
Section: Chapter Questions
Problem 15PAE
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- You are a business manager working for a firm in a purely competitive market and you just hired a summer intern who does not understand how to derive the firms’ short run supply curve from the firms’ marginal cost curve.
a)Please explain to the intern how the short run supply curve is derived from the firm’s marginal cost curve. Be specific.
b.) Please explain to the intern the characteristics of long run equilibrium of a purely competitive firm and how operating in a purely competitive market might impact the decision-making of the firm. Please include the implications of long-run equilibrium for productive and
- Please include the 3 assumptions, as well as the implications for economic profit, productive efficiency and allocative efficiency.
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