The Short-Run Market Supply Curve
3 years ago
Microeconomics
The short-run industry supply curve is the summation of the supply curves of the individual firms.
Elasticity of supply = ES = ( ΔQ / Q ¿ /( ΔP / P ¿
Perfectly inelastic supply = arises when the industry’s plant and equipment are so fully utilized that greater output can be achieved only if new plants are built Perfectly elastic supply = arises when marginal is constant
Producer surplus = Sum over all units produced by a firm of differences between the market price of a good and the marginal cost of production. (area under the price and above the marginal cost)
Producer surplus = R – VC
Profit = π = R – VC – FC
Bijay Satyal
Dec 1, 2021