Explain how the long run differs from the short run in pure competition.
Pure Competition in Short and Long Run
Review the narrated lectures on Pure Competition (Click Here) and (Click Here).
1. Explain how the long run differs from the short run in pure competition.
2. Explain how the entry and exit of firms affects resource flows and long-run profits and losses. (Refer to attached picture)
Solution preview
Long run is different from the short run in pure competition since the entrance or exit of companies in markets occur during this long-term existence. In the short run, a certain number of companies exist within an industry and each has a fixed size of their plant that cannot be changed or altered in the short run. Imperatively, firms may close since they have zero units in their production line during this time……………………….
APA
274 words