Long Run Equilibrium for Typical Firm and Industry - Zero Profits

   Perfectly competitive industries must adjust to changes in demand and supply conditions, just as simple markets do. However, the change is more complex in perfect competition than in simple supply and demand analysis. This is because we have both short and long run changes to consider.

   We begin with an industry in long run equilibrium as shown, suppose a change occurs and examine the short and long run adjustments to the change.

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