Economics (McConnell) AP Edition, 19th Edition

Chapter 9: Pure Competition in the Long Run

The content of this chapter may be included on the AP* Microeconomics exam.

After reading this chapter, you should be able to:

1. Explain how the long run differs from the short run in pure competition.
2. Describe why profits encourage entry into a purely competitive industry and losses result in firms exiting the industry.
3. Explain how the entry and exit of firms affects resource flows and long-run profits and losses.
4. Explain the differences between constant-cost, increasing-cost, and decreasing-cost industries.
5. Show how long-run equilibrium in pure competition produces an efficient allocation of resources.
6. Discuss creative destruction and the profit incentives for innovation.

AP Chapter 09 Introduction (9.0K)