Reading: Perfect Competition in the Short Run
What
is Perfect Competition
•Homogenous
Products (All perfect substitutes)
•All
firms have access to factors of production
•Large
number of buyers and sellers
•Free
entry/exit to/from markets
•Perfectly
elastic demand curve
•Perfect
knowledge / information
•Profit
maximization
Price
and Output in Perfect Competition
•When
drawing perfect competition diagrams, remember to make a distinction between
the market and a representative individual firm.
•Each
individual firm is a price taker in a perfectly competitive market
•Average
revenue equals marginal revenue at every level of output
•We
must assume that the aim of each firm is to find a profit-maximizing output
The
Shut Down Price (Short Run)
Последнее изменение: вторник, 14 августа 2018, 10:21