Perfect Competition Market

Front

In a perfect competition scenario, what is the marginal revenue of an individual firm like Rizky's lemonade stand?

Back

equals the price of the product

Front

The demand curve in a purely competitive industry is ______, while the demand curve to a single firm in that industry is ______.

Back

downsloping, perfectly elastic

Front

Imagine Angga is running a firm and he's eager to expand the amount of output he produces. He knows that as long as his

Back

marginal revenue exceeds his marginal cost

Front

Hey Adi, imagine you're running a lemonade stand! If the price is P1, how much lemonade will you decide to produce?

Back

where MC equals P1

Front

Imagine you're running a lemonade stand. If you decide to boost your output from Q2 to Q3, what will happen?

Back

decrease its profit

Front

What is the short-run supply curve for a perfectly competitive firm related to? Hint: It's related to its marginal cost curve and comes into play above the minimum point on the...

Back

average variable cost curve

Front

Average fixed cost when producing 4 units of output?

Back

$1.00

Front

What is the average variable cost when producing 2 units of output?

Back

$2.00

Front

Imagine Rani and Wawan are running a lemonade stand. They discover that their demand curve is perfectly elastic! What does this mean for their lemonade sales?

Back

They can sell as much lemonade as they want at the current price

Front

Hey Adi, imagine you're running a competitive firm in the short run! To figure out how to maximize your profits (or minimize losses), what should you do? Equate:

Back

marginal revenue and marginal cost