All Questions
Tagged with long-run microeconomics
18 questions
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Long Run Model of Oligopolies After Recession
I am currently investigating about the long run impact of the COVID 19 to the US airline industry. Is there any specific (long-run) model that I can use for oligopolies (for 4 main companies)? Because ...
4
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2
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532
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Why is the supply function the first derivative of the profit function in the long run?
We have the profit function of the firm profit = $p^2 -2p -399$.
We take derivative of it we say that the output supply function is =$2p-2$
I understand that Profit = q*p - TC
But why do we say the ...
0
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1
answer
198
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Long-run equilibrium number of firms is indeterminate when all firms in the industry share the same constant technology and factor prices are same
Why is the long-run equilibrium number of firms indeterminate when all firms in the industry
share the same constant returns-to-scale technology and face the same factor prices? How to show it ...
1
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2
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381
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how does monopolisitic competition make profit in the long run in reality
guys, I have this doubt that if the fast food industry such as KFC, and Maccas are examples of monopolistic competition how are they still making a profit? Because as per the model in long run the ...
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2
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1
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436
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How would a perfectly competitive industry respond to a macroeconomic demand shock in the long run?
In microeconomics, we are taught that in a perfectly competitive industry, the long-run industry supply curve is horizontal. This is because new firms would enter or exit until the profit is driven to ...
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2
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888
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Why is the number of firms in the short run fixed?
My textbook says that in perfect competition the condition of free entry and exit only applies to the long run equilibrium. Because in the short run no new firms can enter or old ones can leave the ...
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0
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246
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Finding long run total cost function
I am trying to find the long run total cost function, given the firm's production function $y=L^α K^β$ where $α,β>0$ and two inputs $L$ and $K$ where $ L,K∈R_+^2$, with factor prices $w$ and $r$ ...
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508
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Deriving long-run cost functions from production function
Suppose that I have a production function $(aK + bL)^3$ in a perfect competition where a and b are constants. I am confused on how to obtain the long-run cost function from this production function ...
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1
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1
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873
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In the long run, would a production-possibility curve expand outward if the country preferred more consumer goods than capital goods?
PPC will not expand outward if the country preferred more consumer
goods than capital goods.
The total amount of resources in an economy at any given point of time
is fixed. If a country ...
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1
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3
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767
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Is it possible that the minimum point of a short run cost curve does not touch the long run cost curve?
In the answer to this question, the answerer said "the minimum point of a short run cost curve will be above the long run cost curve". Is it true? If so, how would it be so?
I thought that if e.g. ...
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Finding long run equilibrium price, quantity and number of firms with a linear average cost function
I've been been brushing up on my micoreocnomics lately and I came across a question in Perloff that looked really simple, but for some reason I am struggling to answer:
Assume we are in the long run ...
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1
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136
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Why are the concepts of short-run and long-run equilibrium exclusive to aggregate supply and demand and macroeconomics?
Shouldn’t there also be a concept of short vs. long-run equilibrium in microeconomics? After all, short-run equilibrium describes the state of the economy when wages and prices are still adjusting and ...
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2
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0
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56
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Firms Entry/Exit Due to Economic Profit in a Perfectly Competitive Market
According to the textbooks,in a long run equilibrium, the market price will be equal to the minimum point of firm's ATC curve. But every firm's ATC curve will differ i.e each one of them will have ...
- 21
1
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1
answer
8k
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Number of firms in Long Run
In a competitive market, is it possible to know the change (increase/decrease) in number of firms in the Long run with a positive shift in demand for increasing costs case?
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1
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685
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Is there any difference between using LRAC and LRATC in a long-run market structure diagram?
I am currently being taught to use average total cost (ATC) to label the U-shaped curve in the short-run on a market structure diagram, and long-run average cost (LRAC) for the equivalent curve in a ...
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1
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2k
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Why do firm output decreases when fixed cost decreases in Long Run?
So in long run if fixed cost is lowered, more firms enter the industry and increase the supply, bringing up industrial output. According to the firm diagram, Average Cost lowered so that the firm ...
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535
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Short Run vs Long Run Cost Functions
Let $z_a$ and $z_b$ are two vectors of inputs. $z_a$ is variable in both long run and short run however $z_b$ is only variable in long run.
Now let's suppose that the price of one of the inputs in ...
- 616
2
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1
answer
23k
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How do I calculate quantity to minimize long-run average total cost?
I have a formula for the long-run total cost curve,
$$TC(Q) = 6000Q + 40Q^2 + Q^3$$
and I'm trying to find the quantity that minimizes the long-run average total cost.
I assume I'm trying to find ...
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