ECON 2300 Lecture Notes - Marginal Cost, Marginal Revenue
Document Summary
Econ 2300 summer 2011 mark melatos. Topic 5 perfect competition june 14. Perfect information: firms know their costs, prices, technology, consumers know prices, quality, etc. Why study this industry structure: such markets exist, a useful benchmark case, impact of technology (internet), the ideal (if often unattainable) structure. Plant size fixed in the sr fixed costs. What is profit: total revenue total cost, i. e. - do firms maximise profit, manager vs. owner incentives, manager effort not directly observable/verifiable. Marginal revenue (mr) the additional revenue obtained from selling an extra. Marginal cost (mc) the additional to tc from producing an extra unit of output unit of output slope of tr curve.
