AP-微观经济学讲义-完全竞争

1of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsChapter10PerfectCompetition-ByJacindaJia2of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsPerfectCompetitionintheMarketforOrganicApplesAfterstudyingthischapter,youshouldbeableto:Defineaperfectlycompetitivemarket,andexplainwhyaperfectcompetitorfacesahorizontaldemandcurve.Explainhowaperfectcompetitordecideshowmuchtoproduce.Usegraphstoshowafirm’sprofitorloss.Explainwhyfirmsmayshutdowntemporarily.Explainhowentryandexitensurethatfirmsearnzeroeconomicprofitinthelongrun.Explainhowperfectcompetitionleadstoeconomicefficiency.LEARNINGOBJECTIVES12345Theprocessofcompetitionisattheheartofthemarketsystemandisthefocusofthischapter.63of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsFirmsinPerfectlyCompetitiveMarketsTheFourMarketStructures11–1MARKETSTRUCTURECHARACTERISTICPERFECTCOMPETITIONMONOPOLISTICCOMPETITIONOLIGOPOLYMONOPOLYNumberoffirmsTypeofproductEaseofentryExamplesofindustriesManyIdenticalHigh•Wheat•ApplesManyDifferentiatedHigh•SellingDVDs•RestaurantsFewIdenticalordifferentiatedLow•Manufacturingcomputers•ManufacturingautomobilesOneUniqueEntryblocked•First-classmaildelivery•Tapwater4of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsPerfectlyCompetitiveMarketsLEARNINGOBJECTIVE1PerfectlycompetitivemarketAmarketthatmeetstheconditionsof(1)manybuyersandsellers,(2)allfirmssellingidenticalproducts,(3)nobarrierstonewfirmsenteringthemarket.5of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsPerfectlyCompetitiveMarketsAPerfectlyCompetitiveFirmCannotAffecttheMarketPricePricetakerAbuyerorsellerthatisunabletoaffectthemarketprice.11-1APerfectlyCompetitiveFirmFacesaHorizontalDemandCurve6of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsHowaFirmMaximizesProfitinaPerfectlyCompetitiveMarketLEARNINGOBJECTIVE2ProfitTotalrevenueminustotalcost.Profit=TR-TC11-2TheMarketDemandforWheatversustheDemandorOneFarmer’sWheatDon’tConfusetheDemandCurveforFarmerDouglas’sWheatwiththeMarketDemandCurveforWheat7of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsHowaFirmMaximizesProfitinaPerfectlyCompetitiveMarketRevenueforaFirminaPerfectlyCompetitiveMarketAveragerevenue(AR)Totalrevenuedividedbythenumberofunitssold.QTRAR=PQQPQTRAR=×==so,Marginalrevenue(MR)Changeintotalrevenuefromsellingonemoreunit.or,quantityinChangerevenueintotalChangeRevenueMarginalQTRMR∆∆==8of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsHowaFirmMaximizesProfitinaPerfectlyCompetitiveMarketRevenueforaFirminaPerfectlyCompetitiveMarketFarmerDouglas’sRevenuefromWheatFarming11–2NUMBEROFBUSHELS(Q)MARKETPRICE(PERBUSHEL)(P)TOTALREVENUE(TR)AVERAGEREVENUE(AR)MARGINALREVENUE(MR)012345678910$44444444444$0481216202428323640-$4444444444-$44444444449of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsHowaFirmMaximizesProfitinaPerfectlyCompetitiveMarketRevenueforaFirminaPerfectlyCompetitiveMarketFarmerDouglas’sProfitsfromWheatFarming11–3QUANTITY(BUSHELS)(Q)TOTALREVENUE(TR)TOTALCOSTS(TC)PROFIT(TR-TC)MARGINALREVENUE(MR)MARGINALCOST(MC)012345678910$0.004.008.0012.0016.0020.0024.0028.0032.0036.0040.00$1.004.006.007.509.5012.0015.0019.5025.5032.5040.50-$1.000.002.004.506.508.009.008.506.503.50-0.50$4.004.004.004.004.004.004.004.004.004.00$3.002.001.502.002.503.004.506.007.008.0010of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsHowaFirmMaximizesProfitinaPerfectlyCompetitiveMarketRevenueforaFirminaPerfectlyCompetitiveMarket11-3TheProfit-MaximizingLevelofOutput11of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsProfit=(PxQ)−TCIllustratingProfitorLossontheCostCurveGraphLEARNINGOBJECTIVE3−×QQP)(=QProfitQTC,ProfitATCPQ−=Profit=(P−ATC)QOr12of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsShowingaProfitontheGraph11-4TheAreaofMaximumProfitIllustratingProfitorLossontheCostCurveGraph13of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsDeterminingProfit-MaximizingPriceandQuantity11-1LEARNINGOBJECTIVE3OUTPUTPERDAYTOTALCOSTMARGINALCOST0123456789$1.001.501.752.253.004.005.256.758.5010.50-$0.500.250.500.751.001.251.501.752.0014of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsIllustratingWhenaFirmIsBreakingEvenorOperatingataLoss¾P>ATC,whichmeansthefirmmakesaprofit¾P=ATC,whichmeansthefirmbreakseven(itstotalcostequalsittotalrevenue)¾P<ATC,whichmeansthefirmexperienceslosses11-5AFirmBreakingEvenandExperiencingLossesIllustratingProfitorLossontheCostCurveGraph15of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsIllustratingProfitorLossontheCostCurveGraphRememberthatFirmsMaximizeTotalProfit,NotProfitperUnit16of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsLosingMoneyintheMedicalScreeningIndustry11-1Providingpreventivemedicalscansturnedoutnottobeaprofitablebusiness.17of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsDecidingWhethertoProduceortoShutDownintheShortRunLEARNINGOBJECTIVE4Intheshortrunafirmsufferinglosseshastwochoices:¾Continuetoproduce¾StopproductionbyshuttingdowntemporarilySunkcostAcostthathasalreadybeenpaidandthatcannotberecovered.18of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsDecidingWhethertoProduceorShutDownintheShortRunIntheshortrun,afirmsufferinglosseshastwochoices:1.Continuetoproduce.Thefirmwillreduceitslossbelowtheamountofitsfixedcostif,bycontinuingtoproduce,itstotalrevenueisgreaterthanitsvariablecost.2.Stopproductionbyshuttingdowntemporarily.19of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarkets2.Stopproductionbyshuttingdowntemporarily.Duringatemporaryshutdown,afirmmuststillpayitsfixedcosts.If,byproducing,thefirmwouldloseanamountgreaterthanitsfixedcosts,itwillshutdown.Fixedcostsarenotthesameassunkcosts.Asunkcostisacostthathasalreadybeenpaidandcannotberecovered.Thefirmshouldtreatitssunkcostsasirrelevanttoitsdecisionmaking.Thefirm’smarginalcostcurveisitssupplycurveonlyforpricesatoraboveaveragevariablecost.Theshutdownpointistheminimumpointonafirm’saveragevariablecostcurve;ifthepricefallsbelowthispoint,thefirmshutsdownproductionintheshortrunandpaysitsfixedcost.Themarketsupplycurvecanbederivedbyhorizontallyaddingupthequantitythateachfirminthemarketiswillingandabletosupplyateachprice.20of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarkets►Studytips:youshouldberemindedthatthedecisiontoshutdownisnotthesameasdecidingtoleavethemarketorgooutofbusiness.Manyfirmssellgoodsorservicesonlyincertainseasons.Examplesincludeskiresorts,retailstoresnearsummerresortsandChristmastreevendors.Therearesomebusinessesthatshutdownduringsummerorbetweenthefallandspringsemester.Afterstudyingthispartyoushouldbeabletoexplainwhythisisthecorrectdecisionforthesebusinesses.21of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsWhentoCloseaLaundry11-2Keepingabusinessopenevenwhensufferinglossescansometimesbethebestdecisionintheshortrun.22of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsTheSupplyCurveoftheFirmintheShortRunTheFirm’sShort-RunSupplyCurve11-6ShutdownpointTheminimumpointonafirm’saveragevariablecostcurve;ifthepricefallsbelowthispoint,thefirmshutsdownproductionintheshortrun.DecidingWhethertoProduceortoShutDownintheShortRun23of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarkets“IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRunLEARNINGOBJECTIVE5EconomicProfitandtheEntryorExitDecision11-7FirmSupplyandMarketSupply24of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarkets“IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRunEconomicProfitandtheEntryorExitDecisionEconomicprofitAfirm’srevenuesminusallitscosts,implicitandexplicit.EconomiclossThesituationinwhichafirm’stotalrevenueislessthanitstotalcost,includingallimplicitcosts.25of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarkets“IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRunEconomicProfitandtheEntryorExitDecisionFarmerAppleseed’sCostsperYear11–5EXPLICITCOSTSWaterWagesOrganicfertilizerElectricityPaymentonbankloan$25,000$35,000$14,000$5,000$6,000IMPLICITCOSTSForegonesalaryOpportunitycostofthe$100,000shehasinvestedinherfarmTotalCost$30,000$10,000$125,00026of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarkets“IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRunEconomicProfitandtheEntryorExitDecisionECONOMICPROFITLEADSTOENTRYOFNEWFIRMS11-8TheEffectofEntryonEconomicProfits27of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarkets“IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRunEconomicProfitandtheEntryorExitDecisionECONOMICLOSSESLEADTOEXITOFFIRMS11-9TheEffectofExitonEconomicLosses28of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarkets“IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRunEconomicProfitandtheEntryorExitDecisionECONOMICLOSSESLEADTOEXITOFFIRMS11-9TheEffectofExitonEconomicLosses(cont’d.)29of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarkets“IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRunLong-RunEquilibriuminaPerfectlyCompetitiveMarketLong-runcompetitiveequilibriumThesituationinwhichtheentryandexitoffirmshaveresultedinthetypicalfirmjustbreakingeven.30of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarkets“IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRunTheLong-RunSupplyCurveinaPerfectlyCompetitiveMarketLong-runsupplycurveAcurveshowingtherelationshipinthelongrunbetweenmarketpriceandthequantitysupplied.31of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarkets“IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRunTheLong-RunSupplyCurveinaPerfectlyCompetitiveMarket11-10TheLong-RunSupplyCurveinaPerfectlyCompetitiveIndustry32of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsTheDeclineofAppleProductioninNewYorkState11-3WhenapplegrowersinNewYorkStatestoppedbreakingeven,manysoldtheirlandtohousingdevelopers.33of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsPerfectCompetitionandEfficiencyLEARNINGOBJECTIVE6ProductiveEfficiencyProductiveefficiencyThesituationinwhichagoodorserviceisproducedatthelowestpossiblecost.34of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarkets11-2LEARNINGOBJECTIVE6HowProductiveEfficiencyBenefitsConsumers35of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsPerfectCompetitionandEfficiencyAllocativeEfficiencyFirmswillsupplyallthosegoodsthatprovideconsumerswithamarginalbenefitatleastasgreatasthemarginalcostofproducingthem:¾Thepriceofagoodrepresentsthemarginalbenefitconsumersreceivefromconsumingthelastunitofthegoodsold.¾Perfectlycompetitivefirmsproduceuptothepointwherethepriceofthegoodequalsthemarginalcostofproducingthelastunit.¾Therefore,firmsproduceuptothepointwherethelastunitprovidesamarginalbenefittoconsumersequaltothemarginalcostofproducingit.36of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsPerfectCompetitionandEfficiencyAllocativeEfficiencyAllocativeefficiencyAstateoftheeconomyinwhichproductionreflectsconsumerpreferences;inparticular,everygoodorserviceisproduceduptothepointwherethelastunitprovidesamarginalbenefittoconsumersequaltothemarginalcostofproducingit.37of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsPerfectlycompetitivemarketPricetakerProductiveefficiencyProfitShutdownpointSunkcostAllocativeefficiencyAveragerevenue(AR)EconomiclossEconomicprofitLong-runsupplycurveMarginalrevenue38of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsFRQs1-ExplainwhyfirmsmayshutdowntemporarilyShouldJillDittoContinueProducing?JillDittooperatesaphotocopystorenearauniversitycampus.ItistheendofMayandJillistryingtodecidewhethersheshouldremainopeninJune,whenthestudentpopulationattheuniversityisatitslowestleveloftheyear.Shegathersthefollowinginformation:ExpectedsalesduringJune50,000copiesPrice$0.10percopyExplicitCostsLeasepaymentforrentofstore$1,200Leasepaymentforcopymachines1,000Wagesfortwoemployees1,200Paper2,500ImplicitCostsSalaryJillcouldearnmanaginganotherstore$3,000ShouldJillremainopenforbusinessinJune?39of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsSolution1:Step1:Thisproblemisaboutwhetherafirmshouldshutdown,soyoumaywanttoreviewthesectionDecidingWhethertoProduceortoShutDownintheShortRun.Step2:Jillshouldremainopenforbusinesssolongasthelossshemakesisnogreaterthanwhatshewouldloseifsheshutdown.So,wefirstneedtocalculateherlossifsheshutsdown.AssumethatJillwouldbeabletomanageanotherstoreduringthemonthherstorewouldbeshutdown.IfJillshutsdown,shewillhavenorevenueandshewillhavethefollowingfixedcosts:Leasepaymentforrentofstore$1,200Leasepaymentforcopymachines1,000Total$2,200Step3:CalculateJill’slossifsheoperatesduringJune.Jill’slosswillequaltohertotalrevenueminushertotalcost:Totalrevenue:50,000x$0.10percopy$5,000Explicitcost$5,900Implicitcost3,000Totalcosts:$8,900Loss$3,900Becauseshewillloselessbyshuttingdownthanbyoperating,JillshouldshutdownherstoreinJune.40of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsSolution2:P=$0.1ATC=$8,900/50,000=$0.178Explicitcost$5,900Implicitcost3,000Totalcosts:$8,900AFC=$2,200/50,000=$0.044Leasepaymentforrentofstore$1,200Leasepaymentforcopymachines1,000Totalfixedcost2,200AVC=ATC-AFC=0.178-0.044=$0.134P＜AVCJillshouldshutdownherstoreinJune.41of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsFRQ2:What’sthedifferencebetweenthefirm’sshutdownpointintheshortrunandinthelongrun?Whyarefirmswillingtoacceptlossesintheshortrunbutnotinthelongrun?42of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsAn:1.Intheshortrun,afirmwillshutdownifthepricefallsbelowtheminimumpointonitsaveragevariablecostcurve.2.Inthelongrun,afirmwillshutdown(exit)ifthepriceisbelowtheminimumpointonitsaveragetotalcostcurve.3.Intheshortrun,thefirmiswillingtoacceptlosses,becauseitcannotdoanythingaboutitsfixedcosts–andmustpaythemwhetherornotitisproducinganything.4.Inthelongrun,however,thefirmcanexittheindustryifitexpectscontinuedlosses.43of35©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER11:FirmsinPerfectlyCompetitiveMarketsEnd! -ByJacindaJia PerfectCompetitionintheMarketforOrganicApples FirmsinPerfectlyCompetitiveMarkets PerfectlyCompetitiveMarkets PerfectlyCompetitiveMarkets HowaFirmMaximizesProfitinaPerfectlyCompetitiveMarket HowaFirmMaximizesProfitinaPerfectlyCompetitiveMarket HowaFirmMaximizesProfitinaPerfectlyCompetitiveMarket HowaFirmMaximizesProfitinaPerfectlyCompetitiveMarket HowaFirmMaximizesProfitinaPerfectlyCompetitiveMarket IllustratingProfitorLossontheCostCurveGraph þÿ IllustratingProfitorLossontheCostCurveGraph IllustratingProfitorLossontheCostCurveGraph DecidingWhethertoProduceortoShutDownintheShortRun DecidingWhethertoProduceorShutDownintheShortRun þÿ þÿ DecidingWhethertoProduceortoShutDownintheShortRun “IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRun “IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRun “IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRun “IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRun “IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRun “IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRun “IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRun “IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRun “IfEveryoneCanDoIt,YouCan’tMakeMoneyAtIt”–TheEntryandExitofFirmsintheLongRu