ECON 1050 Chapter Notes - Chapter 12: Social Cost, Technological Change, Economic Surplus
5 Dec 2017
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Econ chapter 12 notes and terms perfect competition. Perfect competition arises if the minimum efficient scale of a single producer is small relative to the market demand for the good/service. A firm"s minimum efficient scale is the smallest output at which long-run average cost reaches its lowest level. A price taker is a firm that cannot influence the market price because its production is an insignificant part of the total market. (takes the best price it can). A firm"s goal is to maximize profit (total revenue cost). A firm"s total revenue = price of its output x the number of units of output sold: tr curve is an upward sloping straight line. A firm"s marginal revenue = change in the tr that results from a one-unit increase in the quantity sold (change in tr divided by change in quantity sold): horizontal line at the price of the product. In perfect competition, the firm"s marginal revenue = market price.
