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Either graphically or descriptively, describe how an individual firm in a perfectly competitive market with other...

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Economics

Either graphically or descriptively, describe how an individualfirm in a perfectly competitive market with other identical firmsresponds to an inward shift (decrease) in the demand curve fortheir product and the short run and long run implications this hasfor the market price and quantity. Additionally, illustrate eithergraphically or descriptively how the elasticity of supply for bothfirms and the market typically changes from the short-run to thelong-run.

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3.6 Ratings (569 Votes)
SHORT RUN In order to maximize profits in a perfectly competitive market firms set marginal revenue equal to marginal cost MRMC MR is the slope of the revenue curve which is also equal to the demand curve D and price P In the shortterm it is possible for economic profits to be positive zero    See Answer
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