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4 Cards in this Set
- Front
- Back
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Entry and Exit Decisions in the Long-run |
Firms will enter when P > AC
Exit when P < AC |
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Normal Profit |
When economists say 0 profits, they mean what normal people mean by normal profits |
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Sunk costs on entry and exit |
Sunk costs are incurred and can never be recovered.
Do not enter unless the the price of a good > min AC long enough to cover entry costs
Exit when you are certain a price of a good will be < min AC in the long-run otherwise go thru it in short-run. |
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Increasing Cost Industries |
An industry where it is exactly difficult to duplicate outputs E.g. Oil, coffee, copper, gold, silver, nuclear engineers |
