How industry entry and exit affects long run supply curves
In short: Explore the mechanics of constant cost industries. This video explains how the entry or exit of new firms impacts individual firm costs and differentiates between short run and long run market supply curves.
In a perfectly competitive market, a constant cost industry is defined by a specific stability: the costs faced by each individual firm remain unaffected by the movement of other firms into or out of the industry.
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Sources
- Summary by Intellect · source: Long run supply curve in constant cost perfectly competitive markets | Microeconomics | Khan Academy
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