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Operation in the short run of fixed costs

The curves demonstrated in this figure reflect that: (i) operation in the short run since fixed costs can be measured in the graph. (ii) a disequilibrium that will force some competitors to exit this market. (iii) how firms innovate new technologies in response to profit opportunities. (iv) a disequilibrium for the industry which will attract new firms within the market. (v) a firm making total economic profit equivalent to area aPed.

1960_Fixed Costs.png

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