Econ Lecture 15

Econ Lecture 15 - Econ Lecture 15 MC= MR 14:59 Conditions...

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Econ Lecture 15 14:59 Conditions for Perfect Competition   MC= MR Total cost of what people spend on shoes = total return of it Total revenue = total cost at blob. Make some people better off without making people that worse off = efficient  PAGE 486 COLANDER – chapter 21  “added dimension” perfect optimality. Perfect competition Price = Marginal Cost and Average cost If equilibrium equals price equals marginal cost and average cost Theory of Perfect Competition Conditions Lots of buyers and sellers Each firms in a compt market faces a very elastic demand curve o Firms in perfect competition can be price taker – takes the market price as  a given does not have a price policy price taker – firm that fits the competitive market price maker – price discretion – not perfectly elastic no entry no exit barriers 
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o no need for permission from the king, democratic party. Etc… no need for 
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This note was uploaded on 01/19/2011 for the course ECON 2005 taught by Professor Zirkle during the Fall '07 term at Virginia Tech.

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Econ Lecture 15 - Econ Lecture 15 MC= MR 14:59 Conditions...

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