Question

Explain how the long run differs from the short run in pure competition

Solutions

Verified
Answered 5 months ago

In long run, the factors of production are perfectly mobile.

This means that the firm can easily repurpose its capital in some more productive or more profitable production.

The biggest difference between the short run and the long run is the elasticity of supply.

Because all the factors are mobile, the firms can easily leave the market if they do not make a profit, or some other firms can enter the market if there is still profit to be made.

This makes the supply curve more elastic in contrast to the one from the short run which is perfectly unelastic (it is vertical on the S&D graph)

Create an account to view solutions

By signing up, you accept Quizlet's Terms of Service and Privacy Policy
Continue with GoogleContinue with Facebook

Create an account to view solutions

By signing up, you accept Quizlet's Terms of Service and Privacy Policy
Continue with GoogleContinue with Facebook

More related questions

1/2

1/3