In this lecture, we continue to learn about competition, and its implications for the supply curve for different goods. We can use this to construct the market supply curve from firms' supply curves. Now we have all the ingredients for fully understanding the basic supply and demand diagrams that launched our study of economics.
In this lecture, we will learn about the factors that influence a firm's shutdown decision. Image courtesy of johnthurm on Flickr.
Keywords: Shutdown decisions; market supply curves; short-run market equilibrium; long-run market equilibrium.
Read the recitation notes, which cover new content that adds to and supplements the material covered in lecture.
Before watching the lecture video, read the course textbook for an introduction to the material covered in this session:
- [R&T] Chapter 9, "Competitive Markets for Goods and Services."
- [Perloff] Chapter 8, "Competitive Firms and Markets." (optional)
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- Short Run Shutdown Decisions (cont.) (00:06:51)
Short Run Shutdown Decisions (cont.)
- Determining Short Run Market Equilibrium (00:12:29)
Determining Short Run Market Equilibrium
- Long Run Market Equilibrium: Firm Entry and Exit (00:12:34)
Long Run Market Equilibrium: Firm Entry and Exit
- Long Run Market Supply Curve with Perfect Competition (00:06:15)
Long Run Market Supply Curve with Perfect Competition
- Long Run Market Supply Curve in Real World (00:11:56)
Long Run Market Supply Curve in Real World
This concept quiz covers key vocabulary terms and also tests your intuitive understanding of the material covered in this session. Complete this quiz before moving on to the next session to make sure you understand the concepts required to solve the mathematical and graphical problems that are the basis of this course.