Perfect Competition


Profit maximization:  
1.  MR=MC
2.  The level of output where MR=MC
3.  The price at the MR=MC output compared to the ATC
        a.  If P>ATC--Economic Profit
        b.  If P=ATC--Normal Profit
        c.  If P < ATC but greater than AVC--Loss Minimizing
        d.  If P < AVC the firm will shut down


Perfect Competition: Short Run Loss to Long Run Equilibrium



Perfect Competition-SR Profit to LR Equilibrium




Short-run supply and shutdown decision



Khan Academy-Perfect Competition




In the short run firms can produce at a profit, at a loss, or shutdown.  

Shut Down Rule


Perfect Competition--Short Run


Behavior of firms and markets in the short run and in the long run

Long Run



Efficiency and perfect competition




GRAPHING PRACTICE:

Prefect Competition--Graphing



https://drive.google.com/file/d/0B9lcUp4C8sFlS3VpQUhrVFlfMFk/edit?usp=sharing

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