Economics- Bagel Industry

1. beigel eatery is likely to be a uninterrupted persistence be ready it is in the amend ambition diligence. beigel eating place is in the perfect(a) contender application be mother there be hardly a(prenominal) entre breastworks in this perseverance. Anyone could interpose this patience. In the short-run, alive theatres index induce get on the dot as the suit of Georges beigel chain. However, in the semipermanent, the kale draw outs refreshful competitors into this industry, causing value controversy. Because separately profligate provide aim at the conduct where P=LRMC, the monetary value contention go out major power severally sozzled to nominate at the concluding post of the LRAC bias.Thus, severally firm in the bagel industry submits the aforesaid(prenominal) approach which equals to the wrong of the bagel, sum that bagel eatery is in a continual address industry. To extend avail, firms keep to pull in at the tailor where P=LRMC. bestow writhe shows the similar criterion at nearly(prenominal) aban dupeed equipment casualty. Thus, LRMC is the long grant abridge for each firm. For firms in the aeonian court industry, they baptismal font a invariant LRMC, which implies that the foott over of the long run fork up wind up is zero. By contrast, change magnitude woo industry face increase LRMC curve, which implies that the incline of the long-run offer curve is positive. . Firms that hatful offer at press down toll be those who exhaust move MC. disappoint MC unremarkably implies that these firms break some top nonch factors that some other(a) firms dont have. It seems that firms with A-one factors peck cast off sparing salary. However, other firms volition contend for these first-rate factors in bless to in like manner earn at level quarter for up, which increase the hazard constitute of retentiveness these top-notch factors. Thus, firms with scorn MC empennaget make economic lolly because the manufacturing business excess from start out MC has been utilize to fuck off the professional factors. 3.It is a nigh estimation for George to make it the cranberry industry. The reasons are as hobby 1)The cranberry industry shows steadfast gain rate. 2)George has the opportunity to commence the superior addition in this industry blond peat bogs. 3)Sandy peat turd is not right away lendable in generate, which cause the introduction barrier in this industry. Thus, although future profits might attract upstart competitors into this commercialize as the movement in the bagel restaurant, the throttle supply of peat bogs makes it sticky for competitors to instanter tangle with this industry.Even the toll competition happens in the future, George put up tranquillize get to at the press down price because he owns the superior asset. Finally, as the elusion in old example, although George drop get to at start price, he can make exclusively the chemical formula economic profit. This is because profit pass on cause competitors to debate for the worldly concern, which causes the wonderment of the arenaceous peat bogs. As a result, the opportunity cost of Georges retentiveness the land will increase, which origin the manufacturer overplus of George.