if the perfectly competitive market supply of pork bellies shifts from qs

Perfectly competitive market and so the new marginal revenue curve is gonna be right over there. New marginal revenue curve for all of the players in this So if this was P sub one, now we have this newĮquilibrium price, P sub two, which is going to define a Now, what's going to be the quantity that firm A produces in that one? Remember, firm A is one of many firms. You might get to a situation like this where you have more entrance and you got the supply curve two. Something like you might get to a situation like this. And what's going to happen? Well, you might get to Gonna have more supplies, one way to think about it. But what's gonna happen as you have entrance into this market? Well, that's gonna shift the I would wanna put my resources into this market so that I can make that positive economic profit as well.

Includes opportunity cost, so a lot of you will say hey, If folks see other folks makingĪ positive economic profit, remember, economic profitĭoesn't just account for regular cost, it also Now, that's in the short run,īut now let's think about what will likely happen in the long run. Times the number of units, so the area of this rectangle is that positive economic

Get this much per unit and then you multiply, so the height is how much you get per unit and then you multiply that Is the average total cost, that is your marginal revenue, and so you are going to And the way that we can see that is at this quantity, this And as we've talked about in other videos, at that quantity, they're going So for this firm at thisĬurrent state of affairs, it would be rational for them to produce this quantity right over there. Higher than the marginal cost up to including when the marginal revenue is equal to the marginal cost. Quantity to produce, but it would be rationalįor them to keep producing while the marginal revenue is So they're not going to set the price, but they can choose what

Price right over here, marked with this a dotted line, and as we've talkedĪbout in multiple videos, the firms in that perfectlyĬompetitive market, the perfectly competitive firms, they just have to price takers, so the market price is going to be their marginal revenue curve. Multiple times already, is our supply and our demand curves for our perfectly competitive market, and you can see the equilibrium So what we have on the left-hand side, and we've seen this Perfectly competitive markets in the long run. Dig a little bit deeper into what happens in

If the perfectly competitive market supply of pork bellies shifts from qs