Transcript Long-Run Outcomes in Perfect Competition

Long-Run Outcomes in Perfect
Competition
Lesson 5.60
The Industry Supply Curve
• The Industry Supply Curve shows the
relationship between price and total output.
The Long-Run Industry Supply Curve
• The Long-Run Industry Supply Curve will be more elastic
(everything is more elastic in the long run.)
– As more suppliers enter the market, prices drop
Effects of an Increase in Demand
• Long-Run and Short-Run
– In the Short-Run, and increase in demand will raise prices, and
quantity will follow
– In the Long –Run, prices will move to a point of zero-profit