hubbard01_instructorppt11.pptVIP

Firms in Perfectly Competitive Markets Perfect Competition in the Market for Organic Apples After studying this chapter, you should be able to: Define a perfectly competitive market, and explain why a perfect competitor faces a horizontal demand curve. Explain how a perfect competitor decides how much to produce. Use graphs to show a firm’s profit or loss. Explain why firms may shut down temporarily. Explain how entry and exit ensure that firms earn zero economic profit in the long run. Explain how perfect competition leads to economic efficiency. Firms in Perfectly Competitive Markets Perfectly Competitive Markets Perfectly Competitive Markets How a Firm Maximizes Profit in a Perfectly Competitive Market How a Firm Maximizes Profit in a Perfectly Competitive Market How a Firm Maximizes Profit in a Perfectly Competitive Market How a Firm Maximizes Profit in a Perfectly Competitive Market How a Firm Maximizes Profit in a Perfectly Competitive Market Illustrating Profit or Losson the Cost Curve Graph Determining Profit-Maximizing Price and Quantity Illustrating Profit or Losson the Cost Curve Graph Illustrating Profit or Losson the Cost Curve Graph Losing Money in the Medical Screening Industry Deciding Whether to Produce or to Shut Down in the Short Run When to Close a Laundry Deciding Whether to Produceor to Shut Down in the Short Run “If Everyone Can Do It, You Can’t Make Money At It” – The Entry and Exit of Firms in the Long Run “If Everyone Can Do It, You Can’t Make Money At It” –The Entry and Exit of Firms in the Long Run “If Everyone Can Do It, You Can’t Make Money At It” –The Entry and Exit of Firms in the Long Run “If Everyone Can Do It, You Can’t Make Money At It” –The Entry and Exit of Firms in the Long Run “If Everyone Can Do It, You Can’t Make Money At It” –The Entry and Exit of Firms in the Long Run “If Everyone Can Do It, You Can’t Make Money At It” –The Entry and Exit of Firms in the Long Run “If Everyone Can Do It, You Can’t M