(微观经济学英文课件）Chap14 Firms in Competitive Markets教程教案.pptVIP

Harcourt, Inc. items and derived items copyright ? 2001 by Harcourt, Inc. Firms in Competitive Markets Chapter 14 A market is a group of buyers and sellers of a particular good or service. 4 types of market? perfectly competitive market (Perfect Competition) Monopoly, Oligopoly, Monopolistic Competition Markets perfectly competitive market characteristics: many buyers and sellers . They have a negligible impact on the market price. The goods are largely the same. Firms can freely enter or exit the market. a competitive firm is a price taker Unit 1 Revenue of a Competitive Firm Unit 2 The Firm’s Short-Run Decision Unit 3 The Firm’s Long-Run Decision Unit 4 Supply in a Competitive Market TR(Q) = P×Q TR AR=MR=P Q Unit 1 Revenue of a Competitive Firm TR, AR, MR? Marginal revenue is the change in total revenue from an additional unit sold. When MR MC , will increase Q When MR MC, will decrease Q So When MR = MC Profit is maximized. Profit Q Quantity 0 Price P = AR = MR AC MC P AC Profit-maximizing quantity a. A Firm with Profits When MR=MC Unit 2 The Firm’s Short-Run Decision have FC and VC MC AC MR=AR P O Q E（zero-profit） Q P O MC AC MR=AR AC MC MR=AR AVC P Q O AC MC P Q O AVC MR=AR （A）profit-maximizing （D）shut-down （B）zero-profit （C）loss minimizing E（shut-down point） So.. Find MR=MC then Q，then find AR—AC When P AC ，兀 0 . When P= AC ，兀 = 0 . when AVC P AC ， 兀 0 .but continue (ignore sunk costs ) When P=AVC Critical Point, Shut-down Point P AVC exit A shutdown refers to a short-run decision not to produce anything during a specific period of time Exit refers to a long-run decision to leave the market. The firm considers its sunk costs when deciding to exit, but ignores them when deciding whether to shut down. Sunk costs are costs that have already been committed and cannot be recovered. In the zero-profit equilibrium, the firm’s revenue compensates the owners for the time and money they expend to keep the business going. short-run supply curve dedu