![]() New firms can enter any market existing firms can leave their markets. ![]() In the long run, a firm is free to adjust all of its inputs. Explain the effect of a change in fixed cost on price and output in the short run and in the long run under perfect competition.Explain why under perfection competition output prices will change by less than the change in production cost in the short run, but by the full amount of the change in production cost in the long run.Describe the three possible effects on the costs of the factors of production that expansion or contraction of a perfectly competitive industry may have and illustrate the resulting long-run industry supply curve in each case.Explain why in long-run equilibrium in a perfectly competitive industry firms will earn zero economic profit. ![]() Distinguish between economic profit and accounting profit.
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