Question
As more and more firms enter, n goes to infinity. What does each individual firm's supply converge to as n goes to infinity? What do
As more and more firms enter, n goes to infinity. What does each individual firm's supply converge to as n goes to infinity? What do pE(n) and yE(n) converge to as n goes to infinity. (You do not have to prove anything here. Just use a calculator or website like Wolfram Alpha to plug in bigger and bigger values of n and see what pattern emerges). The takeaway from this last section is that type B firms can always make a profit in a short-run market. Attracted by these profits, more and more type B firms will enter the short-run market. Over time, there will be an infinite amount of firms with each firm producing a very small amount.
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