ECON 2030 Lecture Notes - Perfect Competition, Monopolistic Competition, Market Structure
Document Summary
Many small buyers and sellers: homogeneous good, perfect information: buyer knows what price other sellers are they please. Mc: case 1: p > atc = best option/alternative, equilibrium quantity > 0, profit is positive, case 2: p = atc = just as good as option 1. Today"s menu: monday 23 june 2014: business, practice problems, chapter 13: 1, 2, 5, 7, 8, 11, 15-17, 21, chapter 14: 1-4, 7-10, 12, 13, second exam: this thursday. There is no better alternative in this case: equilibrium quantity > 0, profit = 0, case 3: case 3: atc > p avc, equilibrium quantity, profit < 0. Profit = (p - atc) x q profit = tr tc. Profit = (p afc avc) x q profit = tr fc vc. Profit = (p-avc) x q afc x q = 0 0. Profit = (p-avc) x q - fc profit = - fc.
