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PERFECT COMPETITION AND SHORT-RUN SUPPLY CURVE: A perfectly competitive firm's supply curve is that portion of its' marginal cost curve that lies above the minimum of the average variable cost curve. A perfectly competitive firm maximizes profit by producing the quantity of output that equates price and marginal cost. As such, the firm moves along it's marginal cost curve in response to alternative prices. Because the marginal cost curve is positively sloped due to the law of diminishing marginal returns, the firm's supply curve is also positively sloped.
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Lesson 21: Factor Demand | Unit 5: Taking Stock
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Page: 23 of 24
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- A few topics you can look forward to in other lessons.
- Factor Supply: Factor demand is only one side of the factor market. The other side, as you might suspect, is factor supply.
- Factor Market Equilibrium: The balance of factor demand and factor supply in the factor market, like any market, generates equilibrium.
- Labor Markets: Labor represents the most widely used factor service throughout the economy.
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AGGREGATE SUPPLY DECREASE, LONG-RUN AGGREGATE MARKET A shock to the long-run aggregate market caused by a decrease in aggregate supply, resulting in and illustrated by a leftward shift of the long-run aggregate supply curve. A decrease in aggregate supply in the long-run aggregate market results in an increase in the price level and a decrease in real production. The level of real production resulting from the shock is a smaller level of full-employment real production.
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BLACK DISMALAPOD
[What's This?]
Today, you are likely to spend a great deal of time waiting for visits from door-to-door solicitors wanting to buy either a how-to book on meeting people or clothing for your pet iguana. Be on the lookout for empty parking spaces that appear to be near the entrance to a store.
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This isn't me! What am I?
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The word "fiscal" is derived from a Latin word meaning "moneybag."
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"Wise men speak because they have something to say; Fools because they have to say something. " -- Plato, philosopher
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LTT
Long-Term Trend
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