The industry supply v)=∑() i.e., the industry supply curve is the horizontal sum of the firms' supply curves f Remarks The industry faces a downward sloping market demand 2. The behavior of each firm in the input market is assumed away by the given c(y) 3. The supply curves for the short run and long run are similar(LeChatelier Principle The equilibrium is where industry demand equals industry supply. t If time horizon comes into play, when entry and exit stop, the industry reaches a ong-run equilibrium t Example 2. 1. Consider a decrease in demand. t Example 2.2. Find the equilibrium for f Industry denand: y=a-bp, Firms cost: ci(yi)=yi+1 Example 2. 3. Consider a sales tax t on producers, where p(y) and p(y) are industry demand and supply. f 2. Monopoly Monopoly one firm: the firm industry downward-sloping demand: control price and quantity no entry: possible long- run profit Three types of monopolies 1. single-price monopoly: charges the same price for each and every unitThe industry supply: y(p) ≡ [m i=1 yi(p), i.e., the industry supply curve is the horizontal sum of the firms’ supply curves. † Remarks: 1. The industry faces a downward sloping market demand. 2. The behavior of each firm in the input market is assumed away by the given c(y). 3. The supply curves for the short run and long run are similar (LeChatelier Principle). The equilibrium is where industry demand equals industry supply. † If time horizon comes into play, when entry and exit stop, the industry reaches a long-run equilibrium. † Example 2.1. Consider a decrease in demand. † Example 2.2. Find the equilibrium for † Industry demand : yd = a − bp, Firms’ cost : ci(yi) = y2 i + 1. Example 2.3. Consider a sales tax t on producers, where pd(y) and ps(y) are industry demand and supply. † 2. Monopoly Monopoly: • one firm: the firm = industry. • downward-sloping demand: control price and quantity. • no entry: possible long-run profit. Three types of monopolies: 1. single-price monopoly: charges the same price for each and every unit. 2—2