Just as a change in demand can disturb a long run equilibrium in perfect competition, so can a change in production costs.

   Remember from our study of costs that we distinguish between changes in variable costs and fixed costs. Either kind of change will alter the long run equilibrium in perfect competition. However, since the adjustment process differs, we will consider both types of cost change.

Examples of Fixed Costs:
Insurance costs, property taxes, building rent, forgone interest, forgone salary, licensing fees.
Examples of Variable Costs:
Raw materials, energy costs, transportation costs, labor costs (usually).

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