Ch9-slides - Chapter Nine Perfectly Competitive Markets...

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Perfectly Competitive Markets Chapter Nine Chapter Nine
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Chapter Nine Overview 1. Introduction: Nakao Growers 2. Perfect Competition Defined 3. The Profit Maximization Hypothesis 4. The Profit Maximization Condition 5. Short Run Equilibrium Short Run Supply Curve for the Firm Short Run Market Supply Curve Short Run Perfectly Competitive Equilibrium Producer Surplus 6. Long Run Equilibrium Long Run Equilibrium Conditions Long Run Supply Curve 1. Introduction: Nakao Growers 2. Perfect Competition Defined 3. The Profit Maximization Hypothesis 4. The Profit Maximization Condition 5. Short Run Equilibrium Short Run Supply Curve for the Firm Short Run Market Supply Curve Short Run Perfectly Competitive Equilibrium Producer Surplus 6. Long Run Equilibrium Long Run Equilibrium Conditions Long Run Supply Curve Chapter Nine
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Chapter Nine Perfectly Competitive Markets A perfectly competitive market consists of firms that produce identical products that sell at the same price. Each firm’s volume of output is so small in comparison to the overall market demand that no single firm has an impact on the market price. A perfectly competitive market consists of firms that produce identical products that sell at the same price. Each firm’s volume of output is so small in comparison to the overall market demand that no single firm has an impact on the market price.
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Chapter Nine Perfectly Competitive Markets A. Firms produce undifferentiated products in the sense that consumers perceive them to be identical B. Consumers have perfect information about the prices all sellers in the market charge A. Firms produce undifferentiated products in the sense that consumers perceive them to be identical B. Consumers have perfect information about the prices all sellers in the market charge
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Chapter Nine Perfectly Competitive Markets C. Each buyer’s purchases are so small that he/she has an imperceptible effect on market price. D. Each seller’s sales are so small that he/she has an imperceptible effect on market price. Each seller’s input purchases are so small that he/she perceives no effect on input prices E. All firms (industry participants and new entrants) have equal access to resources (technology, inputs). C. Each buyer’s purchases are so small that he/she has an imperceptible effect on market price. D. Each seller’s sales are so small that he/she has an imperceptible effect on market price. Each seller’s input purchases are so small that he/she perceives no effect on input prices E. All firms (industry participants and new entrants) have equal access to resources (technology, inputs).
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Chapter Nine Implications of Conditions The Law of One Price: Conditions (a) and (b) imply that there is a single price at which transactions occur. Price Takers:
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This note was uploaded on 07/17/2008 for the course ECON 501.02 taught by Professor Yang during the Winter '08 term at Ohio State.

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Ch9-slides - Chapter Nine Perfectly Competitive Markets...

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