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BLOCK 4.2, (fixed costs are unavoidable in short run), At LR equilibrium…

- - - - Single firm can supply market at a lower average cost than can be achieved by a number of smaller firms (through economies of scale)
    - - Single firm is sole supplier in a market
  - - - Power to influence market price
    - - Exclusive right for specific period of time
- - - - MR = MC
    - - The change in total revenue due to sale of additional unit of output
    - - The remuneration of investment made necessary to run the firm
    - - Q × (P – AC)
        
        Any extra profits
    - - AC = above P
    - - P = below AVC
    - - That part of LRMC above LRAC
        
        In long-run firm will supply as long as P is not below LRAC
    - - MU = P