Chap006.3 - Competition 3. Productive resources are mobile...

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3 Chapter 6: Perfectly Competitive Supply Slide 13 Profit-Maximizing Firms in Perfectly Competitive Markets ± The Perfectly Competitive Market z A market in which no individual supplier has significant influence on the market price of the product. ± A Price Taker z A firm that has no influence over the price at which it sells its product. Chapter 6: Perfectly Competitive Supply Slide 14 Profit-Maximizing Firms in Perfectly Competitive Markets ± The Characteristics of Perfect Competition 1. All firms sell the same standardized product. 2. The market has many buyers and sellers, each of which buys or sells only a small fraction of the total quantity exchanged. Chapter 6: Perfectly Competitive Supply Slide 15 Profit-Maximizing Firms in Perfectly Competitive Markets ± The Characteristics of Perfect
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Unformatted text preview: Competition 3. Productive resources are mobile 4. Buyers and sellers are well informed. Chapter 6: Perfectly Competitive Supply Slide 16 Market Supply and Demand Determine Market Price P Q S D Market Quantity (units/month) Price ($/unit) Chapter 6: Perfectly Competitive Supply Slide 17 D i P The Demand Curve Facing a Perfectly Competitive Firm Individual Firms Quantity (units/month) Individual firm demand Chapter 6: Perfectly Competitive Supply Slide 18 Profit-Maximizing Firms in Perfectly Competitive Markets Concepts of production z Factor of production An input used in the production of a good or service. z Short run A period of time sufficiently short that at least some of the firms factors of production are fixed....
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