Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed.

PART 5 Firm Behavior and the Organization of Industry
Chapter 14 of 36 - Firms In Competitive Markets
Section 14 of 22
…
Figure 4 - The Competitive Firm's Long-Run Supply Curve
In the long run for the competitive firm supply curve is its marginal cost (MC) curve above average total cost (ATC) curve.
If the firm’s product price falls and stays below ATC, the firm exits the market.
This exit is caused by either
· fall in price, e.g. caused by fall in demand or competition
· increase in ATC, e.g. caused by increasing labor or raw materials costs
· no expectations of future profits
…
A similar analysis applies to an entrepreneur who is considering starting a firm and entering a market.
The firm will enter the market if the investor believes it would be profitable in the long run, which occurs when the price of the good > ATC of production.
Per Figures A and B Amazon was founded in 1994 but only started earning profits in 2001.
Although not profitable at first the Amazon stock price went up, with company and public expectations of future profits.
…
similar analysis
dōyō bunseki
同様分析
…
Note in Japanese the vowels can be held to create a different pronunciation for a different word.
Here, dōyō is pronounced “douyou.”
This long vowel usage could easily be ended, the word meaning depending on the sentence context.



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