Scot Wick Blog

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5 th Ed. PART 5   Firm Behavior and the Organization of Industry Chapter 14 of 36   Firms In Competitive Markets Section 23 of 24 … Figure 8 here … The market response of fi rms to a change in demand depends on the time frame. Firms can enter and exit a market in the long run but not in the short run. Consider a market for milk, beginning at long-run equilibrium. Milk-supplying firms are earning zero economic profit, price equals the minimum of Average Total Cost (ATC). Figure 8 panel (a) shows this initial condition · quantity sold in the market is Q1 · price is P1 · long-run equilibrium is point A … Suppose scientists discover milk has wondrous health benefits. Panel (b) shows the short-run response · demand curve for milk shifts from D1 to D2 · quantity demanded and supplied rises from Q1 to Q2 · price rises from P1 to P2 ·

Mostly summarized from Gregory Mankiw’s Principles of Economics, 5 th Ed. PART 5   Firm Behavior and the Organization of Industry Chapter 14 of 36   Firms In Competitive Markets Section 22 of 24 … Figure 8 here … Figure 8 - An Increase in Demand in the Short Run and Long Run Panel (a) initial condition The market starts in a long-run equilibrium, point A. In this equilibrium · each firm makes zero profit · the price equals the minimum average total cost (ATC) … Panel (b) short-run response This shows what happens in the short run when demand rises from D1 to D 2. The equilibrium · goes from point A to point B · price rises from P1 to P 2 · quantity sold in the market rises from Q1 to Q2 Because price now exceeds ATC firms make profits. This encourages new firms to enter the market. … Panel (c) long-run response This shows what happens in the long run after new firms enter the market.

Mostly summarized from Gregory Mankiw’s Principles of Economics, 5 th Ed. PART 5    Firm Behavior and the Organization of Industry Chapter 14 of 36   Firms In Competitive Markets Section 21 of 24 … Table A here … Why do firms in competitive markets stay in business if they make zero profit at price = average total cost? It is because average total cost includes implicit cost. Accountants calculate explicit costs that cause a money flow but do not consider implicit costs which do not. Per Table A, year 1 A farmer’s sales revenue for the year is $250,000 and explicit costs of $150,000. The farmer's accountant calculates he earns an accounting profit of A – B = $100,000 … Originally the farmer invested $1,000,000 to start his farm. He could have instead put his money in the stock market for an average profit of 5% producing a yearly income of $50,000. He also had to give up a job that paid a salary o

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5 th Ed. PART 5   Firm Behavior and the Organization of Industry Chapter 14 of 36 Firms In Competitive Markets Section 20 of 24 … Figure 7 here … Per Figure 7 panel (a) In the long run firms enter or exit the market until economic profit is driven to zero. If price ( P) > average total costs (ATC) there are profits, this encourages new firms to enter the market. If P < ATC there are losses, this encourages some existing firms to exit the market. … The process of firms entry into and exit from the market ends when P settles at ATC. Each competitive firm maximizes profits (or minimizes losses) by choosing a quantity at which P = marginal cost (MC) Market free entry and exit eventually forces P =   ATC. Therefore at market equilibrium, P = MC = ATC   and there is no further market entry and exit.   MC = ATC only when the firm is op

From article Obama and the false prophets of climate alarmism. Christopher Tremoglie. November 11, 2021 For a media that allegedly hates lying former presidents, there sure seems to be a deafening silence when former President Barack Obama does it. Speaking before the U.N. Climate Change Conference in Glasgow, Scotland, Obama blamed the Trump administration for "active hostility toward climate science ," NBC News reported . In doing so, Obama also peddled the same, tired, climate change cultist rhetoric that many leftists embrace despite their bearing no relation to science. … “You’ve been bombarded with warnings about what the future will look like if you don’t address climate change,” Obama said. “And, meanwhile, you’ve grown up watching many of the adults who are in a position to do something about it either acting like the problem doesn’t exist or refusing to make the hard decisions needed to do something about it.” But what if the “warnings” are hype and no

Mostly summarized from Gregory Mankiw’s Principles of Economics, 5 th Ed. PART 5  Firm Behavior and the Organization of Industry Chapter 14 of 36  Firms In Competitive Markets Section 18 of 24 … Figure 6 here … Figure 6 - Short-Run Market Supply In the short run, the number of firms in the market is fixed. As a result · the market supply curve, panel (b) · reflects the individual firms' marginal-cost curves of panel (a) Here, in a market of 1,000 firms · the quantity of output supplied to the market · is 1,000 times the quantity of 100 supplied by each firm … For any given price (P), each firm supplies 100 units as long as P is above average variable cost. … There are two market supply curve cases to consider · short-run situation: a market with a fixed number of firms · long-run situation: a market where the number of firms change as firms exit and enter the market Over short periods of time · it is difficult for firms to enter and exit

  (211117, test, editing...) … always some edits… Novel story character Dean Smith’s Rubric Cube veracity and/or efficacy Hence All Terr hypothesis and HAT book summary. For later theater some key integral fantasies -> realities not here or unclear. This be always to done-and-gone under on-going editing, addition and revision. … Over time positive and negative are in balance in the universe, nature, and culture structure. Framework of atomic philosophy be positive-negative-quark personality types. Negative + quark moves dominant balance if positive becomes dormant. When positive becomes dominant quarks to survive slide to side with the positives and center balance moves toward tHAT. ... 1-About half of people positively see themselves and others as victors or potential ones. 2-These believe in individualism and freedom, divorced from government paternalism. 3-These want social friction, traction-action, uncovered and push All forward toward New non-conformity