Long term supply curve and economic profit | Microeconomics | Khan Academy

Understanding the long term supply curve in terms of economic profit

Microeconomics on Khan Academy: Topics covered in a traditional college level introductory microeconomics course

About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content.

For free. For everyone. Forever. #YouCanLearnAnything

[behindtheline]

thank you sal. My midterm is in an hour. your really simplifying what my prof complicates.

[karkulajda]

Can be the supply curve in the long-term sloping down if the production costs decrease constantly? My materials say that yes, however I cannot imagine that. Thank you!

[utkarshpande]

yes, the professor made a mistake of sounding here..it is still a short run supply curve. only it shows that in the short-run they are ready to produce whatever the market demands and hence a horizontal supply line sentially..

[peter]

I don't understand why he's saying here that all firms have the same economic profit breakeven. This means that lower margin firms have exponentially higher opportunity cost, which ofc makes no sense. Anyone know?

[johnchristopher]

this does not make sense to me. the supply curve would imply that some suppliers would drop out of the market at lower price points. I can see his point that because of long term investments they might not drop right away. but if demand shifts to the left I would expect eventually some suppliers would drop out and the market would eventually clear at the new equalibrium price. his horizontal long term supply curve implies that all suppliers have the same economic break even point. they don't which is why the supply curve slopes up. if they all have the same indifference curve what is the point of the first supply curve? if any one can clarify this for me that would be great

[beingWantable]

OK now I'm confused my economic book says on the long run the supply curve is vertical... but this makes way more sense...

[mli]

Nahh just borrow money at 0% interest rate and you can sell the quantity you want

[Sask]

there is no demand curve in competitive market