장기적 경쟁균형(Long-run Competitive Equilibrium) I

Long-run competitive equilibrium occurs when market price equals the lowest average total cost of production, resulting in zero economic profit for all firms. At this point, firms have no incentive to change production scale, and new firms have no motivation to enter the market. The market stabilizes because neither entry nor exit occurs.

When existing firms earn above-normal profits, new firms enter, increasing market supply and reducing prices. Conversely, when firms incur losses, they exit, decreasing supply and raising prices. This continuous process of entry and exit continues until price settles at a point where remaining firms make zero economic profit, stabilizing the market.

When demand increases, the market demand curve shifts, pushing market price upward. This allows existing firms to earn above-average profits. These higher profits attract new firms into the market, seeking to capitalize on the profitable opportunity. However, increased firm entry shifts market supply, eventually pushing prices back down.

In long-run competitive equilibrium, the market price equals the minimum point on each firm's average total cost curve. Firms optimize their use of resources like labor, ovens, and ingredients to achieve this lowest cost. When price equals minimum average total cost, firms earn zero economic profit and have no incentive to adjust production.

When streaming platforms enter a market with high initial profits, increased content availability drives price competition. As more firms enter, market price falls to equal the minimum average total cost for existing firms. Without profit potential, new firms stop entering, and the market stabilizes in long-run competitive equilibrium.

Perfectly competitive markets self-regulate through the pursuit of self-interest by individual firms. When profits exist, firms enter; when losses occur, firms exit. This dynamic adjustment process continues until price stabilizes at minimum average total cost, achieving an efficient allocation of resources that benefits both producers and consumers.

Bakeries optimize their use of labor, ovens, and ingredients to maximize profits. Over time, as new bakeries enter when prices are high and exit when prices are low, the market price settles where each bakery makes zero economic profit. With no profit incentive, bakeries have no reason to expand or reduce production scale.