Chapter 6 – Perfectly Competitive Supply

Chapter 6 – Perfectly Competitive Supply -...

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Chapter 6 – Perfectly Competitive Supply; Cost Side of the Market - Individual and Market Supply Curves o The quantity corresponds to a given price on the market demand curve o Many suppliers with identical you could just multiply each quantity value on the individual supply curve - Profit Maximizing firms in Perfectly Competitive Markets o Profit Maximization Profit - The total revenue a firm receives minus the sale of its product minus all costs – explicit and implicit – incurred in producing it Profit Maximizing Firm – Firm whose primary goal is to maximize the difference between its total revenues and total costs Perfectly Competitive Markets – A market in which no individual supplier has significant influence o the market price of the product Price Taker – A firm that has no influence over the price at which it sells its product Four Characteristics of Perfectly Competitive Markets All firms sell the same standardized product The market has many buyers and sellers, each of which buy or sell
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Chapter 6 – Perfectly Competitive Supply -...

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