22. Industry supply, and the role of entry and exit

In this video, I demonstrate how to obtain an industry supply curve from the graph of a firm's short run cost curves. Along the way, I describe how firms' entry and exit decisions lead to shifts in the industry supply curve, and I describe the consequences for the long run equilibrium. Finally, this video provides a justification for why price equals the minimum of average cost of the firm in a competitive market with many identical price-taking firms. For a list of videos and links to these videos (organized by topic), check out the Intromediate Microeconomics video web page: http://blog.thisyoungeconomist.com/p/...