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picture1_Competition Pdf 122691 | Presentation 9 Perfect Competition


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File: Competition Pdf 122691 | Presentation 9 Perfect Competition
presentation 9 perfect competition perfect competition explained in 4 minutes long run perfect competition explained in 2 minutes shutting down or exiting industry in perfectly competitive markets explained in 7 ...

icon picture PDF Filetype PDF | Posted on 09 Oct 2022 | 3 years ago
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  Presentation #9:  Perfect Competition
                         Perfect 
                        Competition 
                       explained in 4 ½ 
                         minutes 
                         Long Run 
                         Perfect 
                        Competition 
                        explained in 
                         2 minutes
    Shutting Down or Exiting Industry in Perfectly 
     Competitive Markets explained in 7 minutes
         Market Characteristics
      Market characteristics of FIRMS:
          – # of Firms                                     These 4 
          – Type of Product                                Determine degree 
          – Ease of entering orexiting industry            of price control
          – Amount of Information
        Characteristics of Perfect Competition:
              Perfect      Monopolistic      Oligopoly
           Competition     Competition                       Monopoly
                                        Imperfect Competition
 Examples: Corn, Milk, other “commodities”
                             Many small firms
               Identical products (perfect substitutes)
     Low Barriers - Easy for firms to enter and exit the industry
                     Seller has no need to advertise 
                        Firms are “Price Takers” 
                Each firm has NO control over price. 
      Industry & Firm in Long Run Equilibrium 
                                 “Side by Side” Graph of perfect competition
                    Entire Industry               Long Run Equilibrium
                                                  Economic Profit = Zero           Individual Firm
                                                  Price = Min. of ATC
      Price                  T-Shirts                S         Price                      T-Shirts
                                                       1
                                                                                                          MC
                                                                                                               ATC
                                                                                                               D = MR
        $10 ----------------------    E1                          $10                          --------E1  AVC 1 
                                  ---           D                                              ---
                                  -                1
                                  -                                                            --
                                  Q                                                           Q
                                    1                Qty                                         1             Qty
            Individual firms can sell all of their production at the current Market Price  
                           (Individuals are price takers)… So for a single firm:  
                                             Price = MR = D
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...Presentation perfect competition explained in minutes long run shutting down or exiting industry perfectly competitive markets market characteristics of firms these type product determine degree ease entering orexiting price control amount information monopolistic oligopoly monopoly imperfect examples corn milk other commodities many small identical products substitutes low barriers easy for to enter and exit the seller has no need advertise are takers each firm over equilibrium side by graph entire economic profit zero individual min atc t shirts s mc d mr e avc q qty can sell all their production at current individuals so a single...

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