Competition Table

Competition Table - market or any input market maximized 6...

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Table 19-1 CHARACTERISTICS OF FIRMS IN COMPETITION STRUCTURE ==> CONDUCT ==> PERFORMANCE 1. Many Producers 1. Firms are price takers 1. P = minimum ATC 2. Freedom of entry & 2. Firms minimize costs 2. Firms produce at the exit: (No barriers to minimum point on entry or exit) their ATC 3. Firms produce a 3. No advertising 3. P = MC perfectly homogeneous product. 4. All firms have access 4. Firms cannot collude 4. Firms earn a normal to full information profit in the long run 5. All firms have access 5. No firms have market 5. In the market, to all inputs from power in either the product consumer surplus is competitive input markets
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Unformatted text preview: market or any input market maximized 6. The demand curve 6. Firms will enter the industry 6. Prices and quantities facing each firm is infinitely if the existing firms earn respond quickly to elastic (horizontal) at the excess profits changes in demand market price and supply 7. The market supply curve 7. Firms will exit the industry 7. In the long run, only is the horizontal sum of in the long run if firms are efficient firms will each firm's MC curve taking losses, but P > min AVC, remain above minimum AVC and exit in the short run if P < min AVC...
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