ECON 1 Lecture Notes - Lecture 19: Sunk Costs, Variable Cost, Opportunity Cost

27 views4 pages
18 Nov 2018
School
Department
Course
Professor
elihung and 37582 others unlocked
ECON 1 Full Course Notes
85
ECON 1 Full Course Notes
Verified Note
85 documents

Document Summary

An industry in the long run equilibrium, every firm in industry has zero profits zero profit condition. Short run equilibrium: fixed factors of production. Short run: a period of time during which only some decisions can be changed. Long run: a period of time long enough to allow all decisions to be changed. Stage 1 (long run) decide whether to rent restaurant space. Some costs are fixed in short run. You have already paid overhead (sunk cost), not drawn into the supply curve! Decisions can"t be changed in the short run. Profit for a restaurant: 4* 4 = . If firms lose , regret decision to open. Suppose just 1 restaurant, what is the profit? () Suppose 2 restaurants, what is the profit? () Suppose 3 restaurants, what is the profit? () If there are 4 restaurants, one would leave in the long run. How many restaurants will be open in a long run equilibrium? (3)

Get access

Grade+
$40 USD/m
Billed monthly
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers
Class+
$30 USD/m
Billed monthly
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
7 Verified Answers

Related Documents

Related Questions