Supply in Purely Competitive Markets(2 pages)
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Supply in Purely Competitive Markets
This lecture is about marginal cost and how firms choose what price they sell at. We learned a lot of equations and how they applied.
- Lecture number:
- Lecture Note
- University of Oklahoma
- Econ 1123 - Princ. of Econ-Micro
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ECON 1123 1st Edition Lecture 13 Outline From Previous Lecture (Lecture 12) I. More on Costs II. Looking at the Long run Outline Lecture 13 I. Supply in Purely Competitive Markets A) The Characteristics of Pure competition B) The Purely Competitive firm in short-run equilibrium C) The competitive firm’s marginal revenue schedule D) Short Run Profits and Average Total Costs Lecture 13 Notes I. Supply in Purely Competitive Markets (Note: This does not exist in reality) A) The Characteristics of Pure competition - In Competitive markets we have large numbers of independently action buyers and sellers. So many, in fact, that no individual buyer or seller can really affect market price - Homogeneous Products (No real or imagined differences) i.e. it’s all asprin -Firms can easily enter or exit the industry -Perfect information concerning prices and products -Perfectly mobile resources B) The Purely Competitive firm in short-run equilibrium - short run: some resources are fixed (capital) but some are variable (labor) -Operational objective of the owners and managers: maximize profits or minimize losses -rule for profit maximization or loss minimization- marginal revenue = marginal cost - Marginal Revenue is the additional revenue a firm receives when it sells an incremental unit of output. MR= change in total revenue/ change in output These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.
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