Economics

Long-Term Equilibrium

Cost of production = Money from sales

Profit = 0

Terms

LRAC = Long run average cost

Total cost div # of units

price (p) = min LRAC

dL/dq = 0

Use new p to find q total Q form Q = f(p)

div Q by q to find number of firms

Perfectly Competitive Market

TC/MC/AFC/AVC/ATC

TC = Total Cost

MC = Marginal Cost

FC = Fixed Cost

AFC = Average fixed Cost

VC = Variable cost

AVC = Average variable cost

ATC = Average Total cost

Here average means per unit
So we just divide by q

Marginal is the rate of change with respect to q

Compensating Variation

Returns of scale