Textbook Notes (367,752)
Canada (161,368)
Economics (728)
ECON 1B03 (303)
Chapter 14

Chapter 14

2 Pages
71 Views
Unlock Document

Department
Economics
Course
ECON 1B03
Professor
Usman Hannan
Semester
Fall

Description
CHAPTER 14: FIRMS IN COMPETITIVE MARKETS What is a Competitive Market? The Meaning of Competition - competitive markets: 1) have many buyers and many sellers 2) the goods offered by the various sellers are largely the same - the actions of a single buyer or seller has minimal affect on the market price - sometimes considered a characteristic: 3) firms can freely enter or exit the market in the long run The Revenue of a Competitive Firm - total revenue is proportional to the amount of output (the price will not change) - for all firms the average revenue (revenue/quantity) equals the price of the good - for competitive firms the marginal revenue (change in revenue/additional unit sold) equals the price of the good Profit Maximization and the Competitive Firm’s Supply Curve A Simple Example - compare the marginal revenue and the marginal cost from each unit produced - as long as marginal revenue > marginal cost, increasing the products raises profit The Marginal-Cost Curve and the Firm’s Supply Decision - firms price = marginal revenue + average revenue - to reach profit maximization follow.. 1) if MR>MC increase the output produced 2) if MR
More Less

Related notes for ECON 1B03

Log In


OR

Join OneClass

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

Sign up

Join to view


OR

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.


Submit