ECN 104 Lecture Notes - Lecture 7: Marginal Revenue, Economic Equilibrium, Fixed Cost
16 Mar 2017
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Ecn lecture 7 notes perfect competition in the short run (chapter 9) Market structures: there are 4 market structures: perfect competition, monopoly, monopolistic competition, oligopoly. In today lecture we will talk about perfect competition. The demand curve is not perfectly elastic for the industry it only appears that way to the individual firm, since they must take the market price not matter how much products they make. Average revenue: when a firm charges the same price for each unit of output, the average revenue is just the price of the good. It refers to the total amount of money that the firm collects for the sale of all of the units of their good. It reflects the additional revenue that the firm will receive by producing one more unit of output. When the firm is deciding how much to produce, the firm considers the marginal revenue in their decision.
