Which firms have u-shaped average cost curves

Reference no: EM13700942

In a perfectly competitive industry in which firms have U-shaped average cost curves, the long-run market supply curve is a horizontal line. This market supply curve is not the horizontal sum of individual firms’ long-run supply curves. In this respect, the long-run market supply curve differs from the short-run market supply curve, which, in a perfectly competitive industry, will equal the horizontal sum of individual firms’ short-run supply curves. Why does the derivation of the long-run market supply curve differ from the derivation of the short-run market supply curve?

Reference no: EM13700942

Questions Cloud

Reliable transmission of large volume data : Modern network applications require reliable transmission of large volume of data with bounded delay, between users and data-centres and between data-centres, potentially half way around the earth. What are the limitations in using distributed data c..

Interview with a mental health professional : Provide a brief introductory paragraph identifying and discussing the DSM disorder you have selected (furnish appropriate APA citations and References).

What is the multiplier effect : What the multiplier effect is and what it means. Explain to me in your own words what it means and what the concept entails. If Investment in an economy rises by $20 billion and GDP increases by $80 billion, what is the multiplier effect?

Suppose the federal open market committee decides : Suppose the Federal Open Market Committee decides to buy $40 billion in securities as part of their open market operations. For each of the following, identify whether the component mentioned will increase or decrease. Don't have to explain.

Which firms have u-shaped average cost curves : In a perfectly competitive industry in which firms have U-shaped average cost curves, the long-run market supply curve is a horizontal line. This market supply curve is not the horizontal sum of individual firms’ long-run supply curves. In this respe..

Effect of increase in fixed costs on the firms supply curve : Draw a (standard) U-shaped SAC curve, U-shaped SAVC curve, and upward sloping SMC curve for a perfectly competitive firm. Indicate the firm’s short-run supply curve. What will be the effect of an increase in fixed costs on the firm’s supply curve and..

What economic benefits does such a name confer : According to Inter brand Corporation, the Coca-Cola brand name (not the company) is worth $67 billion. At least theoretically, this is what Coke could get for the name if it decided to sell it to someone else.

Suppose that the capital investment of alternative : Suppose that the capital investment of Alternative 1 is known with certainty. By how much would the estimate of capital investment for Alternative 2 have to vary so that the initial decision based on these data would be reversed? The annual MARR is 1..

Unit-of-account costs arise from the way inflation : Unit-of-account costs arise from the way inflation makes... Menu costs arise from the way inflation: Shoe-leather costs arise from the way inflation...

User Account

All Pages