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#church
- has→
- market power→when it's not perfectly competitive, somebody has market power and can choose the quantity/price
- total revenue→all revenue, price X quantitiy.
- Competitive market ↓
- each participant negligible→countless small buyers and sellers
- free entry→firms can enter and exit with ease.
- perfect information→all useful info, like prices, quality, are freely availa
- no externalities→(only buyer and seller affected)
- Long Run↔longer timeframe, lets production inputs change
- Short Run↔Too short a time frame to change many inputs.
- Fixed Inputs↔Inputs that can only be changed in the firms in competitive markets/Long Run
- costs↔paid, even if the output is zero; Total Cost at Q = 0
- Variable Inputs↔those can be changed in the firms in competitive markets/Short Run
- costs↔cost of Variable inputs;
VC = TC - FC
- costs↔cost of Variable inputs;
- Total Cost↔Total cost of production
- Average Total Cost ↓
- cost per unit
- Total Cost at Quantity / Quantity
- U-shaped, since you start out spreading out fixed costs, then it rises again when production becomes overworked. (more workers/money doesn't always solve the problems caused by overcrowding, not enough machines, not enough space etc)
- Economies of Scale↔on the firms in competitive markets/Long Run ,firms in competitive markets/Average Total Cost can go back up much later, due to advantages of scale on reducing firms in competitive markets/Marginal Cost
- intersects→firms in competitive markets/Marginal Cost curve at the lowest point
- Average Fixed Cost ↓
- firms in competitive markets/Fixed Inputs/costs at Quantity/ Quantity
- Average Variable Cost ↓
- firms in competitive markets/Variable Inputs/costs at Quantity / Quantity
- Marginal Cost ↓
- cost of one more unit, usually rises constantly
- Total Cost at Quantity - Total Cost at (Quantity-1)
MCQ = TCQ-TC(Q-1)
- intersects→firms in competitive markets/Average Total Cost at its lowest point, always.
- Costs image !
