第14章竞争市场上的企业.doc

Chapter 14: firms in competitive markets What is a competitive market? The meaning of competition Competitive market, sometimes called a perfectly competitive market, has two characteristics: There are many buyers and many sellers in the market. The goods offered by the various sellers are largely the same. Buyers and sellers in competitive markets must accept the price the market determines and, therefore, are said to be price takers. Firms can freely enter or exit the market. The revenue of a competitive firm The total revenue is P*Q. Q—farm produces the quantity of product; P—farm sells each unit at the market price. The price of milk does not depend on the quantity of output that the farm produces and sells. Average revenue: total revenue divided by the quantity sold. Marginal revenue: the change in total revenue from an additional unit sold. For all firms, average revenue equals the price of the good. For competitive firms, marginal revenue equals the price of the good Profit maximization and the competitive firm’s supply curve A simple example of profit maximization Total cost includes fixed costs and variable costs. 生产的产品越多，边际成本越大。 As long as marginal revenue exceeds marginal cost, increasing the quantity produced raises profit. The marginal-cost curve and the firm’s supply decision Three features: The marginal-cost curve (MC) is upward sloping. The average-total-cost curve (ATC) is U=shaped The marginal-cost curve crosses the average-total-cost curve at the minimum of average total cost. The price of the firm’s output is the same regardless of the quantity that the form decides to produce. Three general rules for profit maximization” If marginal revenue is greater than marginal cost, the form should increase its output. If marginal cost is greater than marginal revenue, the form should increase its output. At the profit-maximizing level of output, marginal revenue and marginal cost are exactly equal. Because the form’s marginal-cost curve determines the quan