平狄克微观经济学课件(英文).pptVIP

CHOOSING OUTPUT IN THE LONG RUN 8.7 Economic Rent In the long run, in a competitive market, the producer surplus that a firm earns on the output that it sells consists of the economic rent that it enjoys from all its scarce inputs. ● economic rent Amount that firms are willing to pay for an input less the minimum amount necessary to obtain it. Producer Surplus in the Long Run CHOOSING OUTPUT IN THE LONG RUN 8.7 Firms Earn Zero Profit in Long-Run Equilibrium In long-run equilibrium, all firms earn zero economic profit. In (a), a baseball team in a moderate-sized city sells enough tickets so that price ($7) is equal to marginal and average cost. In (b), the demand is greater, so a $10 price can be charged. The team increases sales to the point at which the average cost of production plus the average economic rent is equal to the ticket price. When the opportunity cost associated with owning the franchise is taken into account, the team earns zero economic profit. Figure 8.15 Producer Surplus in the Long Run THE INDUSTRY’S LONG-RUN SUPPLY CURVE 8.8 Constant-Cost Industry ● constant-cost industry Industry whose long-run supply curve is horizontal. Long-Run Supply in a Constant-Cost Industry In (b), the long-run supply curve in a constant-cost industry is a horizontal line SL. When demand increases, initially causing a price rise (represented by a move from point A to point C), the firm initially increases its output from q1 to q2, as shown in (a). But the entry of new firms causes a shift to the right in industry supply. Because input prices are unaffected by the increased output of the industry, entry occurs until the original price is obtained (at point B in (b)). Figure 8.16 The long-run supply curve for a constant-cost industry is, therefore, a horizontal line at a price that is equal to the long-run minimum average cost of production. THE INDUSTRY’S LONG-RUN SUPPLY CURVE 8.8 Increasing-Cost Industry ● increasing-cost industry Industry whose long-run