OOQ Q D4D4 D1D1 MC = S AVC D2D2 D3D3 D5D5 a b c d e Q5Q5 Q4Q4 Q3Q3 Q2Q2 Q1Q1 P5P5 P4P4 P3P3 P2P2 P1P1 D1D1 D3D3 D5D5 D4D4 D2D2 IndustryFirm MR 1 MR 2 MR.

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Presentation transcript:

OOQ Q D4D4 D1D1 MC = S AVC D2D2 D3D3 D5D5 a b c d e Q5Q5 Q4Q4 Q3Q3 Q2Q2 Q1Q1 P5P5 P4P4 P3P3 P2P2 P1P1 D1D1 D3D3 D5D5 D4D4 D2D2 IndustryFirm MR 1 MR 2 MR 3 MR 4 MR 5 PP

Introductory Economics Lecture 19

OOQ Q Costs, revenue QLQL AR 1 D1D1 LRAC S1S1 DLDL AR L SeSe D PLPL P1P1 IndustryFirm P

Long run industry supply curves OOO Q QQ PPP D1D1 S2S2 D2D2 a c b D1D1 D2D2 S1S1 S2S2 ac b D1D1 D2D2 S1S1 S2S2 a c b (a) Constant industry cost (b) Increasing industry cost External diseconomies of scale (c) Decreasing industry cost External economies of scale LR-Supply S1S1

PQTRMRTCMCACT π Table Monopoly

OQ P D MR 5.50 MC AC Graphical illustration

OOO Q QQ PP LRAC AR 1 LRAC AR 2 LRAC a b (a) Firm 1(b) Firm 2Mkt demand curve (1 + 2) AR = D M M = 1+2

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