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Comparative statics for demand and supply

35 bytes added, 21:24, 23 February 2012
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For simplicity, we assume that all demand curves are downward-sloping, i.e., that the [[law of demand]] holds. However, for the supply curves, we consider both upward-sloping and downward-sloping supply curves. While [[short-run supply curve]]s are almost always upward-sloping, [[long-run supply curve]]s may be upward-sloping, flat, or downward-sloping, depending on whether the industry is an [[increasing cost industry]], [[constant cost industry]], or [[decreasing cost industry]].
==Upward-sloping supply curve: Short run and competitive markets==
This is the typical case, particularly for a short-run analysis. This is because the [[short-run supply curve]] is almost always upward-sloping.
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