Tag: Supply

Entry, Exit, and Supply Curves: Constant Costs

Entry, Exit, and Supply Curves: Constant Costs

♪ [music] ♪ – [Alex] Okay — this talk is going to be a bit more involved. What we’re going to show is how a constant cost industry generates a flat supply curve. Let’s begin. A constant cost industry is one where it’s very easy to expand output without pushing up costs. So for example, …

I-Pencil, Redux | Hillsdale College Econ 101

I-Pencil, Redux | Hillsdale College Econ 101

Leonard Read, in 1950, wrote an article called, “I, Pencil,” which became rather famous. In it, he points out all the coordination that’s required for a pencil to be made, and how markets solve the problems of getting lumber from the Pacific Northwest, and rubber from Malaysia, and all the parts of a pencil assembled. …