- Shifts in either the demand curve or the supply curve change the equilibrium price. The extent of such a change depends on the particular shapes of the two curves.
- Economic profits attract entrants into a perfectly competitive market in the long run. This entry continues until economic profits are reduced to zero. At that point the market price equals long-run average cost and each firm is operating at the low point of its long-run average cost curve
- Entry of new firms may have an effect on the prices of firms’ inputs. In the constant cost case however input prices are not affected so the long-run supply curve is horizontal. If entry raises input costs the long-run supply curve is upward sloping. If entry reduces costs the long-run supply curve is downward sloping.