microbook_3e-page86 - x many firms, each small relative to...

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Lecture 6 The Production Process: The Behavior of Profit-Maximizing Firms Eric Doviak Principles of Microeconomics Intro to Firm Behavior x production – process by which inputs are combined, transformed, and turned into outputs x firm – person or a group of people that produce a good or service to meet a perceived demand x we’ll assume that firms’ goal is to maximize profit Perfect Competition
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Unformatted text preview: x many firms, each small relative to overall size of the industry, producing homogenous (virtually identical) products x no firm is large enough to have any control over price x new competitors can freely enter and exit the market Competitive Firms are Price Takers x firms have no control over price x price is determined by market supply and demand Page 86...
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This note was uploaded on 12/29/2011 for the course ECO 311 taught by Professor Willis during the Fall '10 term at SUNY Stony Brook.

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