StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Micro Economics: The Difference between the Short Run and Long run Economists and Price Discrimination - Assignment Example

Comments (0) Cite this document
Summary
The author explains the difference between the short run and long run economists and explains why it is important to make the distinction. The author describes the different types of price discrimination and explains how a firm determines the prices when it faces two different types of consumers. …
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER93.2% of users find it useful
Micro Economics: The Difference between the Short Run and Long run Economists and Price Discrimination
Read TextPreview

Extract of sample "Micro Economics: The Difference between the Short Run and Long run Economists and Price Discrimination"

Download file to see previous pages As long as the firm produces something, it will maximize its profits by producing "on the marginal cost curve. "The firm will have to shut down if it cannot cover its variable costs. As fixed costs are anyway going to be incurred, they are not opportunity costs in the short run -- so they are not relevant to the decision to shut down. Even if the company shuts down, it must pay the fixed costs. But the variable costs are avoidable -- they are opportunity costs! So the firm will shut down if it cannot meet the variable (short run opportunity) costs. But as long as it can pay the variable costs and still have something to apply toward the fixed costs, it is better off continuing to produce.
When the firm's average total cost curve lies above its marginal revenue curve at the profit-maximizing level of output, the firm is experiencing losses and will have to consider whether to shut down its operations. The decisions taken by a firm in such situations is termed as Short-run shut down decisions. Short run equilibrium of a firm can be derived based on the total revenue and total cost and marginal revenue and marginal cost. As firms are price-takers, each firm in an industry tries to maximize its profit by adjusting the output to a level where Marginal Cost (MC) =Marginal Revenue (MR). Profit is the difference between the total revenue obtained from sales and the total cost incurred by the firm.
The long run is defined as "a period long enough to make the cost of all inputs variable." This includes, in particular, capital, plant, equipment, and other investments that represent long-term commitments.
In the long run, the decisions taken would be only exit decisions. Exit decisions are decisions taken by a firm to leave the market. They are not called as Shut-down decisions. Shut-down is only in the short-run. Long run equilibrium plays a crucial role in deciding the existence of the firm. In the long run, there are enough time periods for the firm to cover its losses and earn normal profits. This is because in the long run, all inputs are variable and the firm can have the most profitable level of output i.e. the profit maximization level of output.  ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(Micro Economics: The Difference between the Short Run and Long run Assignment, n.d.)
Micro Economics: The Difference between the Short Run and Long run Assignment. Retrieved from https://studentshare.org/macro-microeconomics/1530173-micro-economics-master-essay
(Micro Economics: The Difference Between the Short Run and Long Run Assignment)
Micro Economics: The Difference Between the Short Run and Long Run Assignment. https://studentshare.org/macro-microeconomics/1530173-micro-economics-master-essay.
“Micro Economics: The Difference Between the Short Run and Long Run Assignment”, n.d. https://studentshare.org/macro-microeconomics/1530173-micro-economics-master-essay.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Micro Economics: The Difference between the Short Run and Long run Economists and Price Discrimination

A Short History of Japanese Film Industry

The response generated from other regions is good enough yet questionable. What do these Asian productions have that attracted the international scene? What does the Korean wave really mean? Furthermore, were their productions in the recent years created in the nature that the other regions would appreciate, diverting from the contemporary film style they used to execute locally so that it would sell in the global market?

The transition from traditional to contemporary entertainment in Japan came a few years before the advent of the 20th century with the production of the first Japanese films, Bake Jizo1 and Shinin No Sosei2, both said produced in 1898. The next year, a short production entitled Geisha no Teodora was cr...
9 Pages(2250 words)Case Study

Can One Person Make a Difference in an Organization

Each individual has something to contribute but at times one person can make a difference to an organization.
Technology today has made it possible to retain and conserve knowledge and transmit it to other people in an organization. The knowledge that has been created by a single individual can be a powerful weapon when retained, transmitted, disseminated and applied. According to Nonaka, new knowledge begins with an individual (Chaston, Badger & Sadler-Smith, 1999). When the new knowledge is generated it is merged with the existing knowledge and new knowledge from other sources and provides the basis for new products and processes. Thus knowledge has been classified into two categories – explicit and tacit. Explici...
6 Pages(1500 words)Case Study

The Relationship Between Security, Risk and Health in a Large Organisation

Managers in modern organizations tend to use appropriately customized policies – in accordance with their firms’ needs and resources (employees, funds, technology) available. The current paper focuses on the examination of the various aspects of security, risk, health and safety within large organizations; Particular emphasis is paid on the fact that the demands of each one of these factors may be differentiated under the pressure of the market conditions and the organizational priorities. The case of Shell in Nigeria has been used as an example in order to show the potential co-existence and interaction of these factors within a specific organizational environment. The measures required and the role of the security ma...
9 Pages(2250 words)Coursework

Narrative Voice, Characterization, and Use of Settings in Catcher in the Rye and a Short History of Tractors in Ukrainian

The same is true of any writer. One is trying to get into a unique writing style, often without deliberate inclinations-- the style emerges of its own, -- but sometimes, the narrative voice as a writing technique is consciously employed by the writer. To start with, it is necessary for the writer to select which POV (point of view) to use.

The author’s persona of a fictional narrative can contribute to or mar the success of the story. Much depends on the plot of the story and how the author wishes to develop it. What is the emotional content of the story as a whole and how the individual emotional levels contribute to the total success of the story? There should not be any artificiality about the development of th...
8 Pages(2000 words)Assignment

Relationship between Money Supply and Inflation in Saudi Arabia

Over the recent past, the effects of money supply, debt and inflation have become contentious issues for debate. Furthermore, frequent cautions concerning the risk of very large budgetary deficits aver that this would send up the upcoming state debt and capital rate as indicated by the rates (interests). As a nation, Saudi Arabia has a bi and enduring budgetary deficit over the past two decades and the government has been forced to go into the market so as to have loan access and to make up for the deficits. Given the impact of this on inflation and other economic variables, it's imperative and of great alarm for strategy architects (strategists) to understand how microeconomics has an effect on money supply, financial plan defici...
10 Pages(2500 words)Speech or Presentation

Malnutrition: A Long Standing Problem among Children

Poverty majorly affects young children and it makes infants very prone to being malnourished. In Africa the situation is probably the worst when compared with any other continent, poverty has completely overshadowed the development of the people there and several young children die because of malnourishment. People who cannot afford even one square meal a day are the ones who are predominantly affected by malnourishment.

 Nutrition is pivotal for growth and progression of normal life and also a disease-free life. It is imperative for everybody and much more important in the case of children and infants because they are in their maximum growth stage. Malnutrition at this stage can have serious repercussions for the...
10 Pages(2500 words)Coursework

Difference in The Roles of Consultant Experts as Compared to Independent Expert

The interpretation given is based on the expert’s specialty which is outside the capability of the court. The independent expert is totally responsible to the court but not to the clients and gives purely factual information. Thus, an independent expert is not supposed to act as an advocate to any of the party in litigation but only act as an expert witness. In litigation, the independent expert should be independent and offer his or her duty as an expert to the court (Crumbley, Lester, Smith, 2005, p62). Unlike the independent expert, the consultant expert provides assistance in the interest of the client. In general, consultant forensic accounting experts provide various assistance which includes; assessment of the weaknes...
10 Pages(2500 words)Case Study

The Relationship Between Common Law and Custom, Equity, and Books Of Authority

This follows the common law theory that cases that have a great deal of similarity should need to be dealt with similarly and decisions or court verdicts passed accordingly, although this may not be viewed as strict practice. Custom, as a historical source of law, could be said to be the legislative statutes or laws that need to be implemented from time to time, and could also be termed as statutory laws that monitor public conduct. Thus, it could be said that while regulatory laws are created and nurtured by legislations and regulations, through the executive powers enforced by executive branch agencies, this is done through the delegation of authority from the top downwards. However, in the case of common law or case law, decisi...
6 Pages(1500 words)Assignment

Conflict Between Researh and Ethics on the Tuskegee Syphilis Study

... followed unethical means to realize study objective and have become textbook examples of unethical research study, one such study being the Tuskegee Study of Untreated Syphilis (Angell, 1997). The Tuskegee Study of Untreated Syphilis is widely considered as one of the most horrific studies in which the basic ethics of conduct has been totally disregarded. The study was based on the hypothesis that black and white people differed in their response to the disease. Before the study was initiated in 1928, the U.S Public Health Services (PHS) had already completed a study in Mississippi in which 25% of the participants who were all black had tested positive for the disease. The PHS intended to expand and continue the study in rural black...
7 Pages(1750 words)Essay

Introductory Economics and Finance: Why Governments Regulate Firms and Markets

By government regulation, it is meant by the rules administered by a government or government agency to influence any economic activity which determines the price, types, and standards of products, and most importantly the conditions under which the entry and exit of the firms are possible.

Like death, it is impossible to keep away from regulation in about every aspect of daily life. The business regulation may be classified into two- economic and social (Litan). The economic regulation deals with price controls and the entry limits of the firms into markets. The second type regulation mostly deals with externalities (the outside influences of the company or firm which may or may not be decided by them)

Examp...
6 Pages(1500 words)Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Assignment on topic Micro Economics: The Difference between the Short Run and Long run Economists and Price Discrimination for FREE!

Contact Us