This is a complete guide to the topic of market structure, curated by straight A students using scientific proven methods for smart notetaking to maximise comprehension and retention, ensuring you a big, red straight A on your report card.
* Normal
profit= min .
level of
profit required to keep the firm in the
the
industry in long run
.
Supernormal profit
&
+ above normal profit.
↳ What the effect
is of
supernormal profit ?
Attracts new firms -
Surplus
↓ Reduced Profit falls to
price - normal profil
-
PERFORMANCE :
↑ Promotes efficiency
threat to be
allocatively efficient /carrota systems
productively
a
-
incentive a : stick
low price to costs
-
cover
-
Prices
>
-
not
competitive firms- small
are
very
&
WHY ?
low .
Large scale + low
mu
unit costs
Economies Of
scale .
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