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Unformatted text preview: Profit: 10, 000 x 1.5 – 1 million – 10, 000 x 1 < 0 Shutdown: loss = a million Do not shut down: loss = 1 million – (15, 000 – 10, 000) > 0 Cost Curves-MC curve goes thru the lowest point of ATC and AVC curves Demand Curve of Individual Firms-perfectly competitive firms have no control over price o an individual firm’s output decision will not change the market price o market supply and demand set the market price P o taken the market price as given, each firm only decides how much to produce (Q)...
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This note was uploaded on 08/30/2011 for the course ECON 1 taught by Professor Tang during the Fall '08 term at UCSD.
- Fall '08