?Producer surplus
?…is the amount a seller actually is paid for a good minus the amount the seller is willing to be paid.?It measures thebenefit to sellers participating in a market.
汪艳
经济管理学院
双语教学示范课程
262013-7-23
Producer Surplus at Price P1
Price
SupplyPB1
ProducerCsurplusP2A汪艳
0
Q2
Q1
Quantity经济管理学院
双语教学示范课程
272013-7-23
The Firm’s Long-RunDecision to Exit or Entera Market
In the long run, the firm exits if the revenue it would get from producing is less than its total cost.
?Exit ifTR < TC
?Exit if(TR/Q) < (LTC/Q)?Exit ifAR < LAC
?P < LAC
汪艳
经济管理学院
双语教学示范课程
282013-7-23
A firm will enter the industry if such an action would be profitable.?Enter ifTR > TC
?Enter if(TR/Q) >( LTC/Q)?Enter ifAR > LAC
?P > LAC
汪艳
经济管理学院
双语教学示范课程
292013-7-23
?Profit Maximizationand Supply Curve
in the long-run?MR(Q)=LMC(Q)?P=MR ?P=LMC
?Zero profit
?P=LMC= min LAC汪艳
经济管理学院
双语教学示范课程
302013-7-23