Answer to Question #309412 in Microeconomics for Juhi

Question

Bring out the essential difference in the nature of equilibrium of a firm under perfect competition in the short run and in the long run.

Answer 1

In the long run, it is seen that both demand and supply of the product will affect the equilibrium in a perfect competition market. as shown below;

In the short run, the equilibrium is seen to be affected by the demand as shown below;