ECON 111 Chapter Notes - Chapter 14: Table Tennis, Marginal Revenue, Market Power
Document Summary
Econ 111: introductory microeconomics university of saskatchewan. Competitive market: a market with many buyers and sellers trading identical products so that each buyer and seller is a price taker. (1) characteristics of a competitive market: There are many buyers and sellers in the market. The goods offered by the sellers are largely the same. There is perfect knowledge of price and technology. Firms can freely enter or exit the market in the long run. (2) total revenue, marginal revenue and average revenue. Marginal revenue = change in total revenue change in quantity. The demand curve perceived by an individual firm is perfectly horizontal at. P = mr = ar. (3) profit maximization and the competitive firm"s supply curve. Example: polly"s ping pong balls is a firm that operates in a competitive market. The ping pong balls sell for per package. Fill in the following table and discuss the profit-maximizing level of output:
