Total revenue: price of its output multiplied by number units of outputs sold (p x q) Marginal revenue : change in total revenue that results from a one-unit increase in quantity sold (dividing change in total revenue by change in quantity sold) Firm can sell any quantity it chooses @ market price. Demand curve for firm"s product = horizontal line @ market price, same as firm"s marginal revenue curve = perfectly elastic. But market demand is not perfectly elastic depends on substitutability of sweaters for other goods & services. Goal of competitive firm = maximize economic profit, given constraints it faces. To achieve firm must decide: how to produce @ minimum cost, what quantity to produce, whether to enter/exit the market. By being on its long-run average cost curve. Demonstrates break-even point when tr = tc & economic profit/ loss (tr-tc) @ given quantity.