Short-Run Industry equilibrium In a short-run, neither entry nor exit can occur Consequently, in a short-run equilibrium, some firms may earn positive economics profits, others may suffer economic losses, and still others may earn zero economic profit
Short-Run Industry Equilibrium In a short-run, neither entry nor exit can occur. Consequently, in a short-run equilibrium, some firms may earn positive economics profits, others may suffer economic losses, and still others may earn zero economic profit
Short-Run Industry equilibrium Short-run industry supply Market demand Y Short-run equilibrium price clears the market and is taken as given by each firm
Short-Run Industry Equilibrium Market demand Short-run industry supply ps e Ys e Y Short-run equilibrium price clears the market and is taken as given by each firm
Short-Run Industry equilibrium Firm 1 Firm 2 Firm 3 ACs AC MC ACs MC MC ps y1 y1 y: y2 y3
Short-Run Industry Equilibrium y1 y2 y3 ACs ACs ACs MCs MCs MCs y1 * y2 * y3 * ps e Firm 1 Firm 2 Firm 3
Short-Run Industry equilibrium Firm 1 Firm 2 Firm 3 ACs AC MC ACs MC MC ps I1>0 ∏<0 I3=0 y1 y1 y: y2 y3
Short-Run Industry Equilibrium y1 y2 y3 ACs ACs ACs MCs MCs MCs y1 * y2 * y3 * ps e Firm 1 Firm 2 Firm 3 P1 > 0 P2 < 0 P3 = 0
Short-Run Industry equilibrium Firm 1 Firm 2 Firm 3 ACs AC MC ACs MC MC ps I1>0 ∏<0 I3=0 1 y1 y y2 y3 Firm 1 wishes Firm 2 wishes Firm 3 is to remain in to exit from indifferent the industry. the industry
Short-Run Industry Equilibrium y1 y2 y3 ACs ACs ACs MCs MCs MCs y1 * y2 * y3 * ps e Firm 1 Firm 2 Firm 3 Firm 1 wishes to remain in the industry. Firm 2 wishes to exit from the industry. Firm 3 is indifferent. P1 > 0 P2 < 0 P3 = 0