In this lesson, our instructor Jibin Park gives an introduction on perfect competition. He discusses the types of market structure: perfect competition, monopoly, oligopoly, and monopolistic competition. He then explains the optimal output rule, the industry supply curve, profitability and production.
The four types of markets structures include Perfect Competition, Monopoly, Oligopoly and Monopolistic Competition.
No matter what market structure, the profit-maximizing quantity and output will be where Marginal Cost (MC) = Marginal Revenue (MR).
If long-run equilibrium, a perfectly competitive firm makes no economic profit.
The equation for economic profit is Economic Profit = Accounting Profit – Opportunity Cost.
If a perfectly competitive firm is making an economic profit in the short-run, the price will be greater than the ATC. Firms will eventually enter to drive out the profit in the long-run.
If a perfectly competitive firm is incurring an economic loss in the short-run, the price will be less than the ATC. Firms will eventually exit and drive out the loss in the long-run.
Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.
This book created a 5-step plan to help you study more effectively, use your preparation time wisely, and get your best score. This book includes two full-length practice exams modeled on the real test, all the terms and concepts you need to know to get your best score, and your choice of three customized study schedules.
This book includes an in-depth preparation for both AP economics exams. It features two full-length practice tests, one in Microeconomics and one in Macroeconomics, and all test questions answered and explained. It also features a detailed review of all test topics, which include: supply and demand, theory of consumer choice, economics in the public sector, costs, perfect and imperfect competition, monopolies, labor resources, game theory, the national income and gross domestic product, inflation and unemployment, fiscal policy, money and banking, monetary policy, economic growth, international trade and exchange, interest rate determination, and the market for loanable funds.