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Why firms break even in the long run under perfect competition
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Why firms break even in the long run under perfect competition
15:30
About this lesson
- Short-run equilibrium \(\, \)→\( \, \) economic loss, profit, or breaks-even
- Long-run equilibrium \(\, \)→\( \, \) firm always breaks-even
- Firm incentive to enter market when p > ATC
- Firm exits market when p < ATC
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Video 1 of 10
Why firms break even in the long run under perfect competition
16 min
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How demand changes affect long-run equilibrium in perfect competition
11 min
How technological advances restore long-run equilibrium
6 min
Determining if firms enter or exit when equilibrium price is $9
5 min
Break-even case: firms are indifferent when ATC equals price
2 min
Finding the exit price using MC and ATC from a cost table
5 min
Determining the price at which firms enter the market
1 min
Finding the long-run equilibrium market price at $10
1 min
Demand increase from shutdown point: does it guarantee economic profit?
5 min
Natural disaster shifts costs and long-run return to breaking even
11 min