Studyguide for Chapter 8

Studyguide for Chapter 8 - Study Guide for Chapter 8 The...

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Study Guide for Chapter 8 The objectives of this chapter are to: 1. Explain and define the notion of market structure. Describe the three descriptions of perfect competition. 2. Describe the goals and constraints of a perfectly competitive firm. 3. Explain why each firm in a competitive industry is a price taker. 4. Show how a competitive firm finds its profit-maximizing output level. 5. Use graphs to show a firm’s level of profit or loss. 6. Explain why the competitive firm’s supply curve coincides with its marginal cost curve for prices above the minimum point on its average variable cost curve. 7. Show how the short-run firm supply curve and market supply curve are derived. 8. Understand the reason of firm entering or exiting certain industry and its influence on market supply in the long-run (why in the long-run?) Explain how profit and loss drive changes in markets over the long run. 9. Understand the relationship of short-run ATC, long-run ATC, MC, and MR in the long-run. (Use firm size and economics profit change to explain). 10
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This note was uploaded on 04/07/2008 for the course ECON 202 taught by Professor Guokai during the Spring '07 term at Ole Miss.

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Studyguide for Chapter 8 - Study Guide for Chapter 8 The...

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