I think I know the difference between changes in supply and movement along the supply curve, and your post confuses me. I take the OP’s point to be that, in the long run, a change in demand shifts the short-run supply curve. This is exactly the sort of long-run dynamics scenario McAfee talks about (section 4.2.2, e.g. figures on p. 106). Is McAfee wrong or am I really missing something?
It gets confusing when you talk about how a long run change in demand can shift the short run supply curve when from a social welfare viewpoint what we should care about in this situation is the long run supply curve which wouldn’t change, but reading McAfee I can see that I should not have been so certain that I was right. Thanks!
I think I know the difference between changes in supply and movement along the supply curve, and your post confuses me. I take the OP’s point to be that, in the long run, a change in demand shifts the short-run supply curve. This is exactly the sort of long-run dynamics scenario McAfee talks about (section 4.2.2, e.g. figures on p. 106). Is McAfee wrong or am I really missing something?
It gets confusing when you talk about how a long run change in demand can shift the short run supply curve when from a social welfare viewpoint what we should care about in this situation is the long run supply curve which wouldn’t change, but reading McAfee I can see that I should not have been so certain that I was right. Thanks!