Differential Coefficients in Error Correction Model [Degree of Differentia] Disequilibrium and Correction in Short Run] Once the cointegration [long run equilibrium] between two variables is established, the impact of qualitative variable on first differenced dependent variable [ΔYt or ΔXt] can be examined in error correction model [ECM] to mainly know the degree of differential disequilibrium between short run and long [...]
In this article we will discuss about the long-run equilibrium of the firm and industry. Increase and Decrease in the Number of Firms in the Long Run: We know that the short-run equilibrium of a competitive firm, in the short run, the firm may earn pure profit, i.e., profit in excess of normal profit, as also the profit less than [...]
Learn about the comparison between long-run equilibrium under monopoly and perfect competition. In long-run equilibrium under perfect competition, the price of the product becomes equal to the minimum long-run average cost (LAC) of the firm. In monopoly, on the other hand, long- run equilibrium occurs at the point of intersection between the monopolist's marginal revenue (MR) and long-run marginal cost [...]