ECO 1104 Chapter Notes - Chapter 14: Marginal Revenue, Profit Maximization, Profit Margin

56 views5 pages
3363410481 and 38221 others unlocked
ECO 1104 Full Course Notes
16
ECO 1104 Full Course Notes
Verified Note
16 documents

Document Summary

A market is competitive if each buyer & seller is small compared to size of the market & has little ability to influence market prices. Goal of this chapter = examine how firms make production decisions in competitive markets. As a background for this analysis, we begin by considering what a competitive market is. Market structure provides final element that is needed to derive supply curve. The rules of the game for exchange, after production has taken place. It places constraints on pricing behaviour of firms. Up until now, we still do not know what p & q the firm will select. Competitive market: a market in which there are many buyers and many sellers so that each has a negligible impact on the market price (price takers) A firm in a competitive market tries to maximize profit, which equals total revenue minus total cost (cid:1844)= (cid:1844) (cid:1843) (cid:1844)=(cid:1844)(cid:1843) =(cid:1842) (cid:1843)(cid:1843) =(cid:1842) (cid:1844) (cid:1843)=(cid:1844: total revenue = price x quantity.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related textbook solutions

Related Documents

Related Questions