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Micro 13

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Gale Pooley
Gale Pooley

Micro 13

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Microeconomics Lecture 13 Perfect Competition
Video Project Must be original Can be inspired Plagiarism Honor Code
Questions?
Four Market Types Perfect Competition Monopoly Monopolistic Competition Oligopoly
Perfect Competition Many Buyers Many Sellers No one has power Product is same Easy to enter or leave market
Perfect Competition $ Q Total Market $5 D S 0 100 200 300 400 500 $ Q Individual Firm 0 1 2 3 4 5 $5 No matter how much I sell the price stays the same
Perfect Competition If price does not change, how much should I sell? Marginal Revenue = Marginal Cost
Marginal Revenue Change in Total Revenue Change in Output ∆ TR ∆Q
Perfect Competition As long as you can sell the next unit for more than it costs to make it, keep making units.
Perfect Competition Maximize Profit MR = MC ATC will shift up and down due to Fixed Costs
Marginal Qt y Costs 0 1 $20 2 $15 3 $10 4 $8 5 $5 6 $5 7 $6 8 $7 9 $10 10 $12 11 $15 12 $20 13 $26 14 $52 15 $68 16 $80 Fixed Costs $100 Price $25 How many should you make? What will be your profit?

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