-

market equilibrium Cc upward

sloping -
more firm ,

symmetric relationship between less sell

f.
firm
.

↳ individual are
higher AC
h and AC

effect of international Trade

{•
↳ access

mmoYeeitifem.se

n÷÷÷.i÷÷÷÷
5
-

→ determine n .
c. p
,

CC
→ 3 Step A- Cs - - - -
lower price
y
- - -

relationship
, - - -

→ I . between n s AC I
'
it P > Ac ,

"
ite:: ::: :c :c::: same .. .
" . :
↳ Q I
nd l
I
l
l
, PPC CC ,
loss .

l
leave
↳ A C i n (F) to -8 Equation 8.6
#

h , Nz h
3
h

→ other things equal more firm in the

,
industry , higher AC , less firm produce
→
example S = I m n, = 5, O = too ow n 02=100
, ,
, ,
, 2=10 ,
, ooo
i .
higher AC

→ 2 .
relationship between n and P
↳ Price charge depend on n

↳ more firm , more intense , lower price

↳ firm face straight line demand curve (Q = A -

B (P) )
↳ MR =p -

f- , Max profit = MR
-
- MC

↳ Q =
( th TSX b xD ) -
sxb xp -0 Equation f 7 -

→ b is parameter to measured sensitivity of each firm 's market shave to price charge
↳ Equation 8.8
I
→ MR =p -

( Sb )

↳
Equation 8.9
→ MR Imc
Pi Ct Fb , a = th
Ib
£
E
I
t
→ p -
= c -AD③ D= Ct -
- c -1 x
n Ab
( Price charge by . . .
) tf =
c t Th
Equation 8
↳ . 10
D= c tbh
→ the more firm , lower price
→
markup over me , p -
C =
bth ,
h d
→ 3. firm exit
entry

":÷¥¥I
.

C ,
P

↳ PP ,
downward slope
cc

→ show more firm low price AG - - -

y
- - - -
,

P ,
- -

→ more firm move competition face

,

l l
" E

÷÷:÷÷÷i::c .. .. . . . .
I
,
1
↳ ha , Ps : zero profit In
hi hr hs
Pz = A Cz

when n d h < hi earn profit P, > AC

, , ,
,
.
, enter market
when ht hz > hi loss A G Ps
.
, >
,
,
leave market