Explain short run and long run equilibrium of an economy with the help of diagram

Short run equilibrium

First of all, we need to look at the possible situations in which firms may find themselves in the short run.

With each of the three diagrams above, the situation for the firm is only drawn. The 'market' diagram, from which the given price is derived, is the same every time, so I've missed it out. The main thing is that you understand that the prices P₁, P₂ and P₃ are determined by market demand and market supply. Also note that in all three diagrams, the MC curve cuts the AC curve at its lowest point. Look back at the 'Costs and revenues' topic if you don't remember why.

The three diagrams show the three situations in which a firm could find itself in the short run.

In the top diagram, the given price is P₁. The firm wants to maximise profits, so it produces at the level of output where MC = MR. This occurs at point A. Drop a vertical line to find the firm's output (Q₁). At Q₁, AR > AC and the difference between average revenue and average cost is the distance AB. This is the profit per unit. To find the total super normal profit, we must multiply the profit per unit per the number of units. In the diagram, __________ __________ _____ ____ ____ _____ _____ _________ ____ __________ _________.
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