Hey Everyone! I'm Mr. Willis, and You Will Love Economics!
In this video, I will:
Review how perfectly competitive firms are both productively and allocatively efficient in
the long-run
Identify where productive and allocatively efficiency can be identified on a graph for a
perfectly competitive firm (P=Minimum ATC) (P=MC)
Review the process by which changes in the industry cause perfectly competitive firms
to return to equilibrium in the long-run
Use a side-by-side graph for a perfectly competitive market and firm to investigate how a
perfectly competitive firm goes from earning economic profits to earning normal profits
at long-run equilibrium
Use a side-by-side graph for a perfectly competitive market and firm to investigate how a
perfectly competitive firm goes from taking economic losses to earning normal profits
at long-run equilibrium
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