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LOCAL INPUT: An input that has a relatively small geographic market area due to the high cost of transportation. The high transportation cost means it is easier (that is, less expensive) to locate the production activity near the input rather than trying to bring the input to the production activity. Like many things, local inputs are a matter of degree. At the other end of the spectrum lies transferrable inputs. Natural resources of the land, such as soil fertility, weather conditions, mineral deposits, tend to have the greatest local orientation. Labor and many urban public utilities, such as water distribution and sewage disposable, also tend to fall into the local category.
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Lesson 15: Aggregate Market | Unit 3: Doing Curves
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Page: 11 of 22
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Topic:
Long-Run Equilibrium
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Long-run equilibrium in the aggregate market can be seen by combining the aggregate demand and supply sides (curves) of the market into a graph.- Equilibrium in the long run aggregate market equilibrium is at the intersection of the two curves and at full-employment production.
- At the long-run equilibrium:
- The quantity of real production supplied is equal to the quantity of real production demanded.
- Both sides of the market are satisfied and not inclined to change the price level.
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PERFECT COMPETITION, LONG-RUN EQUILIBRIUM CONDITIONS The long-run equilibrium of a perfectly competitive industry generates six specific equilibrium conditions, including: (1) economic efficiency (P = MC), (2) profit maximization (MR = MC), (3) perfect competition (MR = AR = P), (4) breakeven output (P = AR = ATC), (5) minimum production cost (MC = ATC), and (6) minimum efficient scale (MC = ATC = LRAC = LRMC).
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Woodrow Wilson's portrait adorned the $100,000 bill that was removed from circulation in 1929. Woodrow Wilson was removed from circulation in 1924.
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"Plans are only good intentions unless they immediately degenerate into hard work." -- Peter Drucker, management consultant
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TC
Total Cost
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