Week9_1 - Principles of Microeconomics Econ 2005 Week 9...

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05/07/09 Econ 2005 1 Principles of Microeconomics Econ 2005 Week 9 Competitive markets (ch 9)
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2 About this chapter: Perfect competition and perfectly competitive industry Price taking behavior How a price-taking producer determines its profit- maximizing quantity of output Profits and why an unprofitable producer may continue to operate in the short run Decision to enter and exit a market Short run versus the long run behavior of industries Industry supply curve in the short run and the long run
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3 Perfect Competition A price-taking producer is a producer whose actions have no effect on the market price of the good it sells. A price-taking consumer is a consumer whose actions have no effect on the market price of the good he or she buys. A perfectly competitive market is a market in which all market participants are price-takers.
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4 Perfect Competition Defining a competitive market: Many firms Standardized product The next DVD Free entry and exit Pfizer and Lipitor All firms treat prices as given
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This note was uploaded on 03/30/2008 for the course ECON 2005 taught by Professor Zirkle during the Fall '07 term at Virginia Tech.

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Week9_1 - Principles of Microeconomics Econ 2005 Week 9...

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