TAILIEUCHUNG - Lecture Principles of economics - Chapter 14: Firms in competitive markets

In this chapter we examine the behavior of competitive firms, such as your local gas station. After completing this chapter, students will be able to learn what characteristics make a market competitive, examine how competitive firms decide how much output to produce, examine how competitive firms decide when to shut down production temporarily,. | 14 Firms in Competitive Markets WHAT IS A COMPETITIVE MARKET? A perfectly competitive market has the following characteristics: There are many buyers and sellers in the market. The goods offered by the various sellers are largely the same. Firms can freely enter or exit the market. WHAT IS A COMPETITIVE MARKET? As a result of its characteristics, the perfectly competitive market has the following outcomes: The actions of any single buyer or seller in the market have a negligible impact on the market price. Each buyer and seller takes the market price as given. WHAT IS A COMPETITIVE MARKET? A competitive market has many buyers and sellers trading identical products so that each buyer and seller is a price taker. Buyers and sellers must accept the price determined by the market. The Revenue of a Competitive Firm Total revenue for a firm is the selling price times the quantity sold. TR = (P Q) The Revenue of a Competitive Firm Total revenue is proportional to the amount of output. The

• Kinh tế học
• Principles of economics
• Lecture Principles of economics
• Competitive markets
• Average revenue
• Marginal revenue
• Sunk costs
• Ten principles of economics
• People face tradeoffs
• Opportunity cost
• Marginal changes
• Economics of information
• Consumer choice
• Free rider problem
• Market transactions
• Welfare Economics
• Consumer surplus
• Demand curve
• Efficiency of markets
• Nature of an externality
• Market inefficiency
• Negative externalities
• Principles of microeconomics
• Lecture Principles of microeconomics
• Scarce resources
• Scarcity implies choice
• Choice implies cost
• Principles of agricultural economics
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• Theory of consumer behaviour
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• Dynamics in demand analysis
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