Ask Experts Questions for FREE Help !
Ask
    chakkale's Avatar
    chakkale Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Dec 21, 2009, 06:31 PM
    About efficiencies in short run and long run
    “The recent global economic crisis is now evident in the declining demand worldwide and across many markets. Discuss the short-run and long-run equilibrium effects and the efficiency implications of this decline in demand on firms operating in perfectly competitive markets and firms in monopoly markets. Support your verbal discussion with graphs for both the perfectly competitive and monopoly markets.”

    If someone can help about this question I'll apprecieate it because I'm stuck...
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
    Senior Member
    		  
    #2

    Dec 22, 2009, 05:54 AM
    With a drop in demand across all prices, the demand curve shifts left in the short run. Now think about what that means with respect to the equilibrium point. (Drawing simple graphs will help you get a 'visual'.)

    Now follow that with some thinking about how producers would be expected to respond in the long run. The word 'efficiency' in your question is a clue.

    As producers figure out ways to squeeze more efficiency out of their production processes, what does that mean in terms of profit-dollars per every revenue-dollar? And hence, what does that do to the supply curve?
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Wiring a ceiling fan in middle of run, outlet at end of run [ 5 Answers ]

I am wiring a bedroom ceiling fan and just needed someone to help me figure out part of the wiring I'm not sure about. The goal is to have a 2 gang switch control the light and the fan separately. The switch is at the beginning of the run, then the ceiling fan, and then I also have an "always...

New Compressor Run OK. HVAC Fan only run in Heat mode. [ 15 Answers ]

This board is awesome. I have done some reading first on here. Here's my case: Compr runs fine. Fan on HVAC blower inside runs only in Heat mode. Not on Cool. Not even on "FAN-ON" as opposed to FAN-AUTO. Can this be an issue with relay and board within HVAC? Per other thread, it was talking...

Short run Marginal cost curve [ 0 Answers ]

The short-run marginal cost curve passes through the minimum point of the short-run average variable cost curve. Is this true, false or uncertain and explain?/

View more questions Search