Chapter 6 Notes - Chapter 6 Perfectly Competitive Supply...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
P Q Chapter 6 Perfectly Competitive Supply: The Cost Side of the Market Thinking about supply: the importance of cost P(change in Q) o P=redemption price Highest price someone is willing to pay to obtain any good or service Lowest payment someone would accept Individual and market supply cuves market supply curves are additive (quantity) like demand curves individual supply curves are upward slopping because of principle of increasing opportunity cost Profit - maximizing firms in perfectly competitive markets profit maximization o Profit = total revenue a firm receives from the sale of its product minus all costs o Profit maximizing firm = primary goal is to maximize profit o Perfectly competitive market – no individual supplier has significant influence on the market price of the product o Price takers – a firm that has no influence over the price at which it sells its product Characteristics of perfectly competitive markets 1. All firms have same standardization product
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 2

Chapter 6 Notes - Chapter 6 Perfectly Competitive Supply...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online