Study Guides (238,105)
Canada (114,924)
York University (9,812)
Economics (609)
ECON 1000 (206)
all (27)

econpart7 Notes.docx

7 Pages
Unlock Document

York University
ECON 1000

Chapter 12Perfect competition is a market in which Many firms sell identical products to many buyersThere are no restriction on entry into the marketEstablished firms have no advantage over new onesSellers and buyers are well informed about pricesExamples of highly competitive industriesFarming fishing paper milling the manufacture of paper cups and shopping bags lawn services plumbing painting dry cleaning In perfect competition each firm produces a good that has no unique characteristics so consumers dont care which firms good they buy Perfect competition arises if the minimum efficient scale of a single producer is small relative to the market demand for the good or service In this situation there is room in the market for many firms A firms minimum efficient scale is the smallest output at which longrun average cost reaches its lowest level Firms in perfect competition are price takers A price taker is a firm that cannot influence the market price because its production is an insignificant part of the total market A firms goal is to maximize economic profit which is equal to total revenue minus total cost Total revenueprice of its output of units of output soldThat isTRpricequantityTotal revenue curve shows the relationship between total revenue and the quantity soldTotal revenue curve is an upwardsloping straight line Marginal Revenue is the change in total revenue that results from a oneunit increase in the quantity sold MR TR Q soldIn perfect competition the firms marginal revenue equals the market price So firms marginal revenue curve is a horizontal line at the market price
More Less

Related notes for ECON 1000

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.