10. How we determine cost, revenue, profit Revenue is the income a firm obtains from the sales of its goods or services. MC $ AR = D = MR Output (q)
11. How we determine cost, revenue, profit Normal Profit is the level of profit that is required for a firm to keep the resources they are using in their current use. AC MC $ AR = D = MR = AC Output (q)
12. How we determine cost, revenue, profit AC MC $ LOSS AR = D = MR = AC Output (q)
13. How we determine cost, revenue, profit MC $ AC AR = D = MR = AC ABNORMAL PROFIT Output (q)
17. There is a large number of buyers and sellers. Entering the market is cheap. There are no exit or entry barriers Buyers can switch easily from one seller to another. Firms aim to maximize profits. Why We Are Successful
18. Which Brings Me To My Conclusion… Firm Industry $ $ AC S MC AR = D = MR = AC D E Output (q) Quantity
19. When there is a shortage… Firm Industry S1 $ $ AC S MC LOSS AR = D = MR = AC D E Output (q) Quantity
20. When there is an abnormal profit… Firm Industry $ $ AC S MC S1 AR = D = MR = AC ABNORMAL D E Output (q) Quantity
21. Perfect Competition is the best. Effective Always at equilibrium We are successful Conclusion: Perfect Competition
Editor's Notes
We’re efficient, monopoly isn’t
Break even price is where normal profits are made.
Shut down price is when firms make losses in the short run
There are some key things about our venture that makes it appealing to investors, namely: entering the market is cheap. We are competitive by nature because we survive. We have a vast market and our good will never go out of style or taste. Our competition gets a leg up on us with some new innovation? That’s alright, we steal the idea. Also, we are a low-risk deal.