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Competitive
Markets
Perfect Competition
Production Decisions in Perfect Competition
Long Run Outcomes
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Competitive Markets > Perfect Competition
Perfect Competition
• Definition of Perfect Competition
• Conditions of Perfect Competition
• The Demand Curve in Perfect Competition
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Competitive Markets > Perfect Competition
Definition of Perfect Competition
• The major types of market structure include monopoly, monopolistic competition,
oligopoly, and perfect competition.
• Perfect competition is an industry structure in which there are many firms
producing homogeneous products. None of the firms are large enough to
influence the industry.
• The characteristics of a perfectly competitive market include insignificant
contributions from the producers, homogenous products, perfect information
about products, no transaction costs, and no long-term economic profits.
• In practice, very few industries can be described as perfectly competitive, though
agriculture comes close.
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Competitive Markets > Perfect Competition
Conditions of Perfect Competition
• A perfectly competitive market is characterized by many buyers and sellers,
undifferentiated products, no transaction costs, no barriers to entry and exit, and
perfect information about the price of a good.
• The total revenue for a firm in a perfectly competitive market is the product of
price and quantity (TR = P * Q). The average revenue is calculated by dividing
total revenue by quantity. Marginal revenue is calculated by dividing the change in
total revenue by change in quantity.
• A firm in a competitive market tries to maximize profits. In the short-run, it is
possible for a firm's economic profits to be positive, negative, or zero. Economic
profits will be zero in the long-run.
Perfect Competition in the Short Run
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• In the short-run, if a firm has a negative economic profit, it should continue to
operate if its price exceeds its average variable cost. It should shut down if its
price is below its average variable cost.
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Competitive Markets > Perfect Competition
The Demand Curve in Perfect Competition
• In a perfectly competitive market individual firms are price takers. The price is
determined by the intersection of the market supply and demand curves.
• The demand curve for an individual firm is different from a market demand curve.
The market demand curve slopes downward, while the firm's demand curve is a
horizontal line.
• The firm's horizontal demand curve indicates a price elasticity of demand that is
perfectly elastic.
Demand Curve for a Firm in a Perfectly
Competitive Market
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Competitive Markets > Production Decisions in Perfect Competition
Production Decisions in Perfect Competition
• Relationship Between Output and Revenue
• Marginal Cost Profit Maximization Strategy
• Shut Down Case
• The Supply Curve in Perfect Competition
• Short Run Firm Production Decision
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Competitive Markets > Production Decisions in Perfect Competition
Relationship Between Output and Revenue
• In economics, output is defined as the quantity of goods or services produce in a
certain period of time by a firm, industry, or country. Output can be consumed or
used for further production.
• Revenue, also known as turnover, is the income that a company receives from
normal business activities, usually from the sale of goods and services.
Companies can also receive revenue from interest, royalties, and other fees.
• The performance of a company is determined by how its asset inflows (revenues)
compare with its asset outflows (expenses). Revenue is a direct indication of
earning quality.
Output and Revenue
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Competitive Markets > Production Decisions in Perfect Competition
Marginal Cost Profit Maximization Strategy
• Marginal cost is the increase in total cost from producing one additional unit.
• The marginal revenue is the increase in revenue from the sale of one additional
unit.
• One way to determine how to generate the largest profit is to use the marginal
revenue-marginal cost perspective. This strategy is based on the fact that the
total profit reaches its maximum point where marginal revenue equals marginal
profit.
Marginal cost curve
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Competitive Markets > Production Decisions in Perfect Competition
Shut Down Case
• Economic shutdown occurs within a firm when the marginal revenue is below
average variable cost at the profit-maximizing output.
• When a shutdown is required the firm failed to achieve a primary goal of
production by not operating at the level of output where marginal revenue equals
marginal cost.
• If the revenue the firm is making is greater than the variable cost (R>VC) then the
firm is covering it's variable costs and there is additional revenue to partially or
entirely cover the fixed costs.
• If the variable cost is greater than the revenue being made (VC>R) then the firm
is not even covering production costs and it should be shutdown.
Shutdown Condition
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• The decision to shutdown production is usually temporary. If the market
conditions improve, due to prices increasing or production costs falling, then the
firm can resume production.
• When a shutdown last for an extended period of time, a firm has to decide
whether to continue to business or leave the industry.
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Competitive Markets > Production Decisions in Perfect Competition
The Supply Curve in Perfect Competition
• In a free market economy, firms use cost curves to find the optimal point of
production (minimizing cost).
• Profit maximization is the process that a firm uses to determine the price and
output level that returns the greatest profit when producing a good or service.
• The total revenue-total cost perspective recognizes that profit is equal to the total
revenue (TR) minus the total cost (TC).
• The marginal revenue-marginal cost perspective relies on the understanding that
for each unit sold, the marginal profit equals the marginal revenue (MR) minus the
marginal cost (MC).
Total cost curve
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Competitive Markets > Production Decisions in Perfect Competition
Short Run Firm Production Decision
• Fixed costs have no impact on a firm's short run decisions. However, variable
costs and revenues affect short run profits.
• When a firm is transitioning from short run to long run it will consider the current
and future equilibrium for supply and demand.
• A firm will implement a production shutdown when the revenue coming in from the
sale of goods cannot cover the variable costs of production.
• A short run shutdown is designed to be temporary. When a firm is shutdown for
the short run, it still has to pay fixed costs and cannot leave the industry.
However, a firm cannot incur losses indefinitely. Exiting an industry is a long term
Short run supply curve
decision.
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Competitive Markets > Long Run Outcomes
Long Run Outcomes
• Long Run Supply Decisions
• Long Run Market Equilibrium
• Productive Efficiency
• Allocative Efficiency
• Entry and Exit of Firms
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Competitive Markets > Long Run Outcomes
Long Run Supply Decisions
• The long-run supply curves of a market is the sum of a series of that market's
short-run supply curves.
• Most supply curves are composed of three periods of production: a period of
increasing returns to scale, constant returns to scale, and decreasing returns to
scale.
• A long-run supply curve connects the points of constant returns to scales of a
markets' short-run supply curves.
Long-run Supply Curve
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Competitive Markets > Long Run Outcomes
Long Run Market Equilibrium
• In a perfectly competitive market, demand is perfectly elastic. This means the
demand curve is a horizontal line.
• Once equilibrium has been achieved, firms in a perfectly competitive market can't
achieve economic profit; it can only break even.
• A perfectly competitive market in equilibrium is productively and allocatively
efficient.
Perfectly Elastic Demand
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Competitive Markets > Long Run Outcomes
Productive Efficiency
• An equilibrium may be productively efficient without being allocatively efficient.
• Another way to define productive efficiency is that it occurs when the highest
possible output of one good is produced, given the production level of the other
good(s).
• Productive efficiency requires that all firms operate using best-practice
technological and managerial processes.
• Productive efficiency requires that all firms operate using best-practice
technological and managerial processes.
Production Possibilities on Frontier Curve
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Competitive Markets > Long Run Outcomes
Allocative Efficiency
• Allocative efficiency occurs where a good or service's marginal benefit is equal to
its marginal cost. At this point the social surplus is maximized with no deadweight
loss.
• Free markets that are perfectly competitive are generally allocatively efficient.
• Allocative efficiency is the main means to measure the degree markets and public
policy improve or harm society or other specific subgroups.
• Under these basic premises, the goal of maximizing allocative efficiency can be
defined according to some neutral principle where some allocations are
objectively better than others.
Final goods
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Competitive Markets > Long Run Outcomes
Entry and Exit of Firms
• Barriers to entry are obstacles that make it difficult to enter a given market. The
term can refer to hindrances a firm faces in trying to enter a market or industry.
Barriers can be obstacles an individual faces in trying to enter into a profession,
such as education or licensing requirements.
• Because firms are able to freely enter and exit in response to potential profit, this
means that in the long-run firms cannot make economic profit; they can only
break even.
• Barriers to exit are obstacles in the path of a firm which wants to leave a given
market or industrial sector.
A patent is an example of an intangible asset
with a limited life.
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Appendix
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Competitive Markets
Key terms
• Allocative efficiency A type of economic condition in which economy/producers produce only those types of goods and services
that are more desirable in the society and also in high demand.
• Barriers to entry Obstacles that make it difficult to enter a given market. The term can refer to hindrances a firm faces in trying
to enter a market or industry, such as government regulation, or a large, established firm taking advantage of economies of
scale.
• barriers to exit Obstacles in the path of a firm that want to leave a market or industrial sector.
• constant returns to scale Changes in output resulting from a proportional change in all inputs (where all inputs increase by a
constant factor). If output increases by that same proportional change then there are constant returns to scale (CRS).
• decreasing returns to scale Changes in output resulting from a proportional change in all inputs (where all inputs increase by a
constant factor). If output increases by less than the proportional change then there are decreasing returns to scale.
• economic profit The difference between the total revenue received by the firm from its sales and the total opportunity costs of
all the resources used by the firm.
• increasing returns to scale The characteristic of production in which output increases by more than the proportional increase in
inputs.
• long-run The conceptual time period in which there are no fixed factors of production.
• marginal cost The increase in cost that accompanies a unit increase in output; the partial derivative of the cost function with
respect to output. Additional cost associated with producing one more unit of output.
• marginal cost The increase in cost that accompanies a unit increase in output; the partial derivative of the cost function with
respect to output. Additional cost associated with producing one more unit of output.
• marginal revenue The additional profit that will be generated by increasing product sales by one unit.
• marginal revenue The additional profit that will be generated by increasing product sales by one unit.
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Competitive Markets
• marginal revenue The additional profit that will be generated by increasing product sales by one unit.
• Monopolistic competition A market structure in which there is a large number of firms, each having a small proportion of the
market share and slightly differentiated products.
• monopoly A situation, by legal privilege or other agreement, in which solely one party (company, cartel etc. ) exclusively
provides a particular product or service, dominating that market and generally exerting powerful control over it.
• oligopoly An economic condition in which a small number of sellers exert control over the market of a commodity.
• output Production; quantity produced, created, or completed.
• Perfectly elastic Describes a situation when any increase in the price, no matter how small, will cause demand for a good to
drop to zero.
• Productive Efficiency An economic status that occurs when when the highest possible output of one good is produced, given
the production level of the other good(s).
• profit Total income or cash flow minus expenditures. The money or other benefit a non-governmental organization or individual
receives in exchange for products and services sold at an advertised price.
• revenue The total income received from a given source.
• shutdown The action of stopping operations; a closing, of a computer, business, event, etc.
• Total Revenue The profit from each item multiplied by the number of items sold.
• variable cost A cost that changes with the change in volume of activity of an organization.
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Competitive Markets
• variable cost A cost that changes with the change in volume of activity of an organization.
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Competitive Markets
Marginal profit maximization
This graph shows profit maximization using the marginal cost perspective.
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Competitive Markets
Total cost curve
This graph depicts profit maximization on a total cost curve.
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Competitive Markets
Perfect Competition in the Short Run
In the short run, it is possible for an individual firm to make an economic profit. This scenario is shown in this diagram, as the price or average revenue,
denoted by P, is above the average cost denoted by C .
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Competitive Markets
A patent is an example of an intangible asset with a limited life.
Patents are an example of intellectual property. If a firm does not own intellectual property relevant to the industry, that could prove to be a significant
barrier to entry into that market.
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Competitive Markets
Marginal cost curve
This graph shows profit maximization using a marginal cost curve.
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Competitive Markets
Short run supply curve
This graph shows a short run supply curve in a perfect competitive market. The short run supply curve is the marginal cost curve at and above the
shutdown point. The portions of the marginal cost curve below the shutdown point are not part of the supply curve because the firm is not producing in
that range.
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Competitive Markets
Output and Revenue
Krispy Kreme's output is donuts. It generates revenue by selling its output. It is however, a profit maximizer, not an output or revenue maximizer.
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Competitive Markets
Long-run Supply Curve
As the chart demonstrates, a market's long-run supply curve is the sum of a series of short-run supply curves in a given market.
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Competitive Markets
Production Possibilities on Frontier Curve
This chart shows production possibilities for production of guns and butter. Points B, C, and D are productively efficient and point A is not. Point X is only
possible if the means of production improve.
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Competitive Markets
Final goods
When an economy has allocative efficiency, it produces goods and services that have the highest demand and that society finds most desirable. For
example, for the U.S. to achieve an allocative efficient market, it would need to produce a lot of coffee.
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Competitive Markets
Demand Curve for a Firm in a Perfectly Competitive Market
The demand curve for an individual firm is equal to the equilibrium price of the market. The market demand curve is downward-sloping.
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Competitive Markets
Shutdown Condition
Firms will produce as long as marginal revenue (MR) is greater than average total cost (ATC), even if it is less than the variable, or marginal cost (MC)
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Competitive Markets
Perfectly Elastic Demand
In a perfectly competitive market, demand is perfectly elastic.
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Competitive Markets
Perfect Competition in the Long Run
In the long-run, economic profit cannot be sustained. The arrival of new firms in the market causes the demand curve of each individual firm to shift
downward, bringing down the price, the average revenue and marginal revenue curve. In the long-run, the firm will make zero economic profit. Its
horizontal demand curve will touch its average total cost curve at its lowest point.
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Competitive Markets
Marginal cost curve
This graph shows a typical marginal cost (MC) curve with marginal revenue (MR) overlaid.
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Competitive Markets
Which of the following market structures maximizes Pareto
efficiency?
A) Monopoly
B) Oligopoly
C) Imperfect competition
D) Perfect competition
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Competitive Markets
Which of the following market structures maximizes Pareto
efficiency?
A) Monopoly
B) Oligopoly
C) Imperfect competition
D) Perfect competition
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Competitive Markets
In which of the following market structures do firms have no
control over the price of goods and services?
A) Oligopoly
B) Monopolistic competition
C) Perfect competition
D) Monopoly
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Competitive Markets
In which of the following market structures do firms have no
control over the price of goods and services?
A) Oligopoly
B) Monopolistic competition
C) Perfect competition
D) Monopoly
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Competitive Markets
Suppose a firm produces widgets in a perfectly competitive
market. The market price is $3 per widget. As the firm moves from
producing its 10th to its 11th widget, what will the marginal
revenue be?
A) $3
B) $30
C) $33
D) $3.30
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Competitive Markets
Suppose a firm produces widgets in a perfectly competitive
market. The market price is $3 per widget. As the firm moves from
producing its 10th to its 11th widget, what will the marginal
revenue be?
A) $3
B) $30
C) $33
D) $3.30
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Competitive Markets
Which of the following is NOT a characteristic of a perfectly
competitive market?
A) Increasing returns to scale
B) Perfect information
C) No transaction costs
D) Many buyers and sellers
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Competitive Markets
Which of the following is NOT a characteristic of a perfectly
competitive market?
A) Increasing returns to scale
B) Perfect information
C) No transaction costs
D) Many buyers and sellers
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Competitive Markets
A green beans producer expects an increase in demand for green
beans, so he decides to raise his price above the market price to
capitalize on this increase in demand. If the market for green
beans is perfectly competitive, what will happen?
A) He will make a positive profit
B) He will make nothing
C) He will make exactly the same profit as his competitors
D) None of the above.
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Competitive Markets
A green beans producer expects an increase in demand for green
beans, so he decides to raise his price above the market price to
capitalize on this increase in demand. If the market for green
beans is perfectly competitive, what will happen?
A) He will make a positive profit
B) He will make nothing
C) He will make exactly the same profit as his competitors
D) None of the above.
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Competitive Markets
Which of the following is true about output and revenue?
A) Output and revenue both focus on large sums of money.
B) Output and revenue are influenced by royalties and interest.
C) Output and revenue cannot be recycled back into the production
cycle.
D) Output impacts revenue.
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Competitive Markets
Which of the following is true about output and revenue?
A) Output and revenue both focus on large sums of money.
B) Output and revenue are influenced by royalties and interest.
C) Output and revenue cannot be recycled back into the production
cycle.
D) Output impacts revenue.
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Competitive Markets
Suppose a T-shirt firm can make 100 shirts at a total cost of $450.
If producing 101 t-shirts costs $456, what is the marginal cost of
the 101st unit?
A) $6
B) $4.50
C) $4.51
D) $5.50
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Competitive Markets
Suppose a T-shirt firm can make 100 shirts at a total cost of $450.
If producing 101 t-shirts costs $456, what is the marginal cost of
the 101st unit?
A) $6
B) $4.50
C) $4.51
D) $5.50
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Competitive Markets
Imagine a firm. At its profit-maximizing output, its marginal
revenue is $50, its average total cost is $120, and its average
variable cost is $70. In the short-run, what will the firm do?
A) Produce more output
B) Produce less output
C) Exit the industry
D) Shut down
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Competitive Markets
Imagine a firm. At its profit-maximizing output, its marginal
revenue is $50, its average total cost is $120, and its average
variable cost is $70. In the short-run, what will the firm do?
A) Produce more output
B) Produce less output
C) Exit the industry
D) Shut down
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Competitive Markets
In a purely competitive market, a firm finds that at its profitmaximizing output level, the Total Variable Cost (TVC)=$550,
Total Fixed Cost (TFC)=$250, and Total Revenue=$700. The firm
should:
A) Shut down in the short run
B) Produce because it can still cover its TVC
C) Produce because it will realize an economic profit
D) Produce because it can still cover its TFC
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Competitive Markets
In a purely competitive market, a firm finds that at its profitmaximizing output level, the Total Variable Cost (TVC)=$550,
Total Fixed Cost (TFC)=$250, and Total Revenue=$700. The firm
should:
A) Shut down in the short run
B) Produce because it can still cover its TVC
C) Produce because it will realize an economic profit
D) Produce because it can still cover its TFC
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Competitive Markets
A firm's profit-maximizing quantity is found at the intersection of
____ and ____ .
A) short-run supply, short-run demand
B) market price, marginal revenue
C) marginal revenue, marginal cost
D) total cost, total revenue
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Competitive Markets
A firm's profit-maximizing quantity is found at the intersection of
____ and ____ .
A) short-run supply, short-run demand
B) market price, marginal revenue
C) marginal revenue, marginal cost
D) total cost, total revenue
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Competitive Markets
Why will a firm not exit an industry even if it is not making a profit?
A) It can still cover the fixed costs of production.
B) It anticipates future changes in market structure.
C) It can still cover the variable costs of production.
D) It is seeking to lower its MC by making feasible, long-term adjustments
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Competitive Markets
Why will a firm not exit an industry even if it is not making a profit?
A) It can still cover the fixed costs of production.
B) It anticipates future changes in market structure.
C) It can still cover the variable costs of production.
D) It is seeking to lower its MC by making feasible, long-term adjustments
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Competitive Markets
Suppose a market is perfectly competitive, and firms are currently
experiencing negative profits. Which chain of events is most likely
to occur in the long run?
A) Firms will leave the market, supply will decrease, and economic profits
will rise to zero
B) Firms will collude, prices will increase, and economic profits will rise to
zero
C) Firms will enter the market, supply will increase, and economic profits
will decrease to zero
D) Firms will enact barriers to entry, prices will increase, and economic
profits will decrease to zero
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Competitive Markets
Suppose a market is perfectly competitive, and firms are currently
experiencing negative profits. Which chain of events is most likely
to occur in the long run?
A) Firms will leave the market, supply will decrease, and economic profits
will rise to zero
B) Firms will collude, prices will increase, and economic profits will rise to
zero
C) Firms will enter the market, supply will increase, and economic profits
will decrease to zero
D) Firms will enact barriers to entry, prices will increase, and economic
profits will decrease to zero
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Competitive Markets
Imagine that a market consists of three firms. At price levels of $2,
$4, $6, and $8, the individual firm's respective outputs are as
follows:Firm 1: 5, 8, 11, 14 Firm 2: 6, 8, 10, 12 Firm 3: 5, 6, 7, 8
What are the output levels for $2, $4, $6, and $8 from the
corresponding market supply curve?
A) 16, 21, 26, 31
B) 16, 22, 28, 34
C) 16, 19, 22, 25
D) 16, 24, 42, 64
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Competitive Markets
Imagine that a market consists of three firms. At price levels of $2,
$4, $6, and $8, the individual firm's respective outputs are as
follows:Firm 1: 5, 8, 11, 14 Firm 2: 6, 8, 10, 12 Firm 3: 5, 6, 7, 8
What are the output levels for $2, $4, $6, and $8 from the
corresponding market supply curve?
A) 16, 21, 26, 31
B) 16, 22, 28, 34
C) 16, 19, 22, 25
D) 16, 24, 42, 64
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Competitive Markets
Which of the following statements describes a long-run supply
curve of a market.
A) The sum of a series of a market's short-run supply curves.
B) Similar in appearance to short-run supply curves, but wider.
C) All of these answers.
D) A curve representing 3 stages of production: increasing, constant, and
decreasing returns to scale.
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Competitive Markets
Which of the following statements describes a long-run supply
curve of a market.
A) The sum of a series of a market's short-run supply curves.
B) Similar in appearance to short-run supply curves, but wider.
C) All of these answers.
D) A curve representing 3 stages of production: increasing, constant, and
decreasing returns to scale.
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Competitive Markets
Which of the following must be true for a perfectly competitive
market to achieve equilibrium?
A) Marginal revenues must equal marginal costs.
B) All of these answers.
C) Marginal revenues must equal average total costs.
D) Marginal costs must equal average total costs.
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Competitive Markets
Which of the following must be true for a perfectly competitive
market to achieve equilibrium?
A) Marginal revenues must equal marginal costs.
B) All of these answers.
C) Marginal revenues must equal average total costs.
D) Marginal costs must equal average total costs.
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Competitive Markets
Which of the following is NOT required for an outcome to be
productively efficient?
A) The production result falls on the production possibility frontier.
B) The outcome is allocatively efficient.
C) Production of one good is achieved at the lowest resource cost
possible.
D) The highest possible output of one good is produced given the
production level of the other goods.
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Competitive Markets
Which of the following is NOT required for an outcome to be
productively efficient?
A) The production result falls on the production possibility frontier.
B) The outcome is allocatively efficient.
C) Production of one good is achieved at the lowest resource cost
possible.
D) The highest possible output of one good is produced given the
production level of the other goods.
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Competitive Markets
When we cannot produce more of any good without giving up
some other good that we value more highly, we have achieved
___________.
A) Allocative efficiency
B) Production
C) Economic Growth
D) Equity
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Competitive Markets
When we cannot produce more of any good without giving up
some other good that we value more highly, we have achieved
___________.
A) Allocative efficiency
B) Production
C) Economic Growth
D) Equity
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Competitive Markets
In a perfectly competitive market there are ____ barriers to entry
and _____ barriers to exit for firms in the long-run.
A) high; high.
B) no; high.
C) no; no.
D) high; no.
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Competitive Markets
In a perfectly competitive market there are ____ barriers to entry
and _____ barriers to exit for firms in the long-run.
A) high; high.
B) no; high.
C) no; no.
D) high; no.
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Competitive Markets
Attribution
• Wikibooks. "IB Economics/Microeconomics/Theory of the Firm (HL)." CC BY-SA 3.0
http://en.wikibooks.org/wiki/IB_Economics/Microeconomics/Theory_of_the_Firm_(HL)#Perfect_Competition
• Boundless Learning. "Boundless." CC BY-SA 3.0 http://www.boundless.com//economics/definition/monopoly
• Wiktionary. "oligopoly." CC BY-SA 3.0 http://en.wiktionary.org/wiki/oligopoly
• Wikipedia. "Perfect competition." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Perfect_competition
• Wikipedia. "Perfect competition." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Perfect_competition
• Wikipedia. "Perfect competition." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Perfect_competition
• Wikipedia. "Imperfect competition." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Imperfect_competition
• Wikipedia. "Market structure." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Market_structure
• Wikispaces. CC BY-SA http://mbaecon.wikispaces.com/Perfect+competition+-%2526nbsp%253BInterpretation+of+the+longrun+supply+curve
• Wikibooks. "Principles of Economics/Perfect Competition." CC BY-SA 3.0
http://en.wikibooks.org/wiki/Principles_of_Economics/Perfect_Competition#Perfect_competition
• Wikibooks. "IB Economics/Microeconomics/Markets." CC BY-SA 3.0
http://en.wikibooks.org/wiki/IB_Economics/Microeconomics/Markets
• Wikipedia. "Monopolistic competition." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Monopolistic%20competition
• Wikibooks. "Microeconomics/Perfect Competition." CC BY-SA 3.0
http://en.wikibooks.org/wiki/Microeconomics/Perfect_Competition
• Wikispaces. CC BY-SA http://mbaecon.wikispaces.com/Perfect+competition+-%2526nbsp%253BInterpretation+of+the+longrun+supply+curve
• Wikispaces. "mrski-apecon-2008 - Chapter 14 FIRMS IN COMPETITIVE MARKET Erica." CC BY-SA http://mrski-apecon2008.wikispaces.com/Chapter+14+FIRMS+IN+COMPETITIVE+MARKET+Erica
Free to share, print, make copies and changes. Get yours at www.boundless.com
• Wikispaces. "mrski-apecon-2008 - Ch.14 Firms in Competitive Markets." CC BY-SA http://mrski-apecon-
Competitive Markets
• Wikia. "Perfect Competition - Central Economics Wiki." CC BY-SA http://centralecon.wikia.com/wiki/Perfect_Competition
• Wikispaces. "mrski-apecon-2008 - Chapter 14 FIRMS IN COMPETITIVE MARKET Erica." CC BY-SA http://mrski-apecon2008.wikispaces.com/Chapter+14+FIRMS+IN+COMPETITIVE+MARKET+Erica
• Wikispaces. "MBA651Fall2007 - Perfect competition - Interpretation of the long-run supply curve (perfect competition)." CC BYSA http://mba651fall2007.wikispaces.com/Perfect+competition+-+Interpretation+of+the+longrun+supply+curve+(perfect++competition)
• Wikispaces. CC BY-SA http://mbaecon.wikispaces.com/Perfect+competition+-%2526nbsp%253BInterpretation+of+the+longrun+supply+curve
• Wikipedia. "Perfectly elastic." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Perfectly%20elastic
• Wikipedia. "Revenue." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Revenue
• Wikipedia. "Economic output." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Economic_output
• Wiktionary. "revenue." CC BY-SA 3.0 http://en.wiktionary.org/wiki/revenue
• Wiktionary. "output." CC BY-SA 3.0 http://en.wiktionary.org/wiki/output
• Wikipedia. "Profit maximization." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Profit_maximization
• Wikipedia. "Marginal revenue." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Marginal_revenue
• Wikipedia. "Marginal cost." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Marginal_cost
• Wiktionary. "marginal cost." CC BY-SA 3.0 http://en.wiktionary.org/wiki/marginal+cost
• Wikipedia. "marginal revenue." CC BY-SA 3.0 http://en.wikipedia.org/wiki/marginal%20revenue
• Wikipedia. "Shutdown (economics)." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Shutdown_(economics)
• Wikipedia. "Monopoly." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Monopoly
• Wiktionary. "marginal cost." CC BY-SA 3.0 http://en.wiktionary.org/wiki/marginal+cost
• Wiktionary. "variable cost." CC BY-SA 3.0 http://en.wiktionary.org/wiki/variable+cost
• Wikipedia. "marginal revenue." CC BY-SA 3.0 http://en.wikipedia.org/wiki/marginal%20revenue
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Competitive Markets
• Wikipedia. "Supply curve." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Supply_curve
• Wikipedia. "Profit maximization." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Profit_maximization
• Wikipedia. "Cost curve." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Cost_curve
• Wikipedia. "Total Revenue." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Total%20Revenue
• Wikipedia. "marginal revenue." CC BY-SA 3.0 http://en.wikipedia.org/wiki/marginal%20revenue
• Wikipedia. "Perfect competition." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Perfect_competition#Short-run_supply_curve
• Wikipedia. "Shutdown (economics)." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Shutdown_(economics)
• Wikipedia. "Long run and short run." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Long_run_and_short_run
• Wiktionary. "shutdown." CC BY-SA 3.0 http://en.wiktionary.org/wiki/shutdown
• Wiktionary. "profit." CC BY-SA 3.0 http://en.wiktionary.org/wiki/profit
• Wiktionary. "variable cost." CC BY-SA 3.0 http://en.wiktionary.org/wiki/variable+cost
• Wikipedia. "Returns to scale." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Returns_to_scale
• Wikibooks. "Principles of Economics/Economies of Scale." CC BY-SA 3.0
http://en.wikibooks.org/wiki/Principles_of_Economics/Economies_of_Scale#Long_run_supply
• Wikipedia. "Perfect competition." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Perfect_competition
• Wikibooks. "Principles of Economics/Supply." CC BY-SA 3.0
http://en.wikibooks.org/wiki/Principles_of_Economics/Supply#Market_long_run_supply
• Wikipedia. "Long run and short run." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Long_run_and_short_run
• Wikipedia. "constant returns to scale." CC BY-SA 3.0 http://en.wikipedia.org/wiki/constant%20returns%20to%20scale
• Wikipedia. "decreasing returns to scale." CC BY-SA 3.0 http://en.wikipedia.org/wiki/decreasing%20returns%20to%20scale
• Wikipedia. "increasing returns to scale." CC BY-SA 3.0 http://en.wikipedia.org/wiki/increasing%20returns%20to%20scale
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Competitive Markets
• Wikipedia. "Perfect competition." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Perfect_competition#Results
• Wikipedia. "Long run." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Long_run
• Wikipedia. "long-run." CC BY-SA 3.0 http://en.wikipedia.org/wiki/long-run
• Wikipedia. "Productive efficiency." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Productive_efficiency
• Wikipedia. "Productive Efficiency." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Productive%20Efficiency
• Wikibooks. "Principles of Economics/Allocation." CC BY-SA 3.0
http://en.wikibooks.org/wiki/Principles_of_Economics/Allocation#Productive_and_Allocative_Efficiency
• Wikipedia. "Allocative efficiency." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Allocative_efficiency
• Wikibooks. "Principles of Economics/Allocation." CC BY-SA 3.0
http://en.wikibooks.org/wiki/Principles_of_Economics/Allocation#Productive_and_Allocative_Efficiency
• Wikipedia. "Allocative efficiency." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Allocative%20efficiency
• Wikibooks. "Microeconomics/Perfect Competition." CC BY-SA 3.0
http://en.wikibooks.org/wiki/Microeconomics/Perfect_Competition
• Wikipedia. "barriers to exit." CC BY-SA 3.0 http://en.wikipedia.org/wiki/barriers%20to%20exit
• Wikipedia. "Barriers to entry." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Barriers%20to%20entry
• Wikipedia. "Barriers to exit." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Barriers_to_exit
• Wikipedia. "Barriers to entry." CC BY-SA 3.0 http://en.wikipedia.org/wiki/Barriers_to_entry
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