Structure for perfectly competitive markets many

Info icon This preview shows pages 3–12. Sign up to view the full content.

View Full Document Right Arrow Icon
Structure for Perfectly Competitive Markets Many firms, and Homogeneous output, and Free entry and exit, and Full and symmetric information. THINK: Apples market, Cortland variety and Jonathan’s apple orchard
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
microL19-F2010-page http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Short Run Profit Maximization In A Perfectly Competitive Output Market Introduce some “new” notation. Jonathan’s output: q The aggregate output of the entire apple market: Q The market price for apples: P Jonathan is a “price taker”. Jonathan’s perceived demand for HIS apples (δ) will be the prevailing market price P. So… for Jonathan, δ = P = marginal revenue.
Image of page 4
microL19-F2010-page http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Jonathan’s Profit Maximizing Move When P=$528 Jonathan's Apple Farm Costs (detail) Apples (tons/year) Land Hired Labor Proprietor's time Total Cost Average Cost Marginal Cost (midpoint formula) 200 12,400 54,400 13,200 80,000 400 210 12,400 58,560 13,200 84,160 401 440 220 12,400 63,200 13,200 88,800 404 484 230 12,400 68,240 13,200 93,840 408 528 240 12,400 73,760 13,200 99,360 414 588 250 12,400 80,000 13,200 105,600 422 632 260 12,400 86,400 13,200 112,000 431
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Jonathan's Apple Farm Costs (detail) Apples (tons/year) Land Hired Labor Proprietor's time Total Cost Average Cost Marginal Cost (midpoint formula) 200 12,400 54,400 13,200 80,000 400 210 12,400 58,560 13,200 84,160 401 440 220 12,400 63,200 13,200 88,800 404 484 230 12,400 68,240 13,200 93,840 408 528 240 12,400 73,760 13,200 99,360 414 588 250 12,400 80,000 13,200 105,600 422 632 260 12,400 86,400 13,200 112,000 431
Image of page 6
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 8
Image of page 9

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
microL19-F2010-page1 http://www.arts.cornell.edu/econ/wissink/econ1110jpw/ Using “The Graph” To Derive Jonathan’s Short Run Supply Curve
Image of page 10
microL19-F2010-page1 http://www.arts.cornell.edu/econ/wissink/econ1110jpw/
Image of page 11

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 12
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern