Perfect Competition Cost Curve Collection Slides 2-5 depict a perfectly competitive market and a firm in that market. The progression from slide 2 through 4 show the areas of total revenue (TR), total cost (TC), and profit. Slides 6-9 illustrate a decrease in demand and how the new market price reduces TR and causes the firm to operate at a loss. The decrease drives the price below the ATC of the firm, which decreases total revenue and produces a loss for the firm. The firm is covering its variable costs and part of its fixed costs. Slides 10-13 illustrates a further decrease in demand, reducing the price for the firm to a point below the AVC curve. The slides indicate even greater loss. At this point, the firm will shut down to minimize losses, but it will still be obligated to its fixed costs. Slides 14-30 could be considered a set. The curves in slides 15-29 are based on the table in slide 14. The table could be printed so that students would have it handy while viewing the graphs. For best results, print the table in "landscape" orientation.
Perfect Competition The Industry The Firm Price Price S MC ATC P P D=MR AVC D0 Q Quantity Q Quantity
Perfect Competition The Industry The Firm Price Price S MC ATC P P D=MR AVC D0 Q Quantity Q Quantity Total Revenue
Perfect Competition Total Cost The Industry The Firm Price Price S MC ATC P P D=MR AVC D0 Q Quantity Q Quantity Total Revenue Total Cost
Perfect Competition Total Cost Profit The Industry The Firm Price MC ATC P P D=MR AVC D0 Q Quantity Q Quantity Total Revenue Total Cost Profit
Perfect Competition P0 P1 P D1 Q1 Q0 The Industry The Firm Price Price MC ATC P0 AVC P1 P D=MR D0 D1 Q1 Q0 Q Quantity Quantity
Perfect Competition P0 P1 P D1 Q1 Q0 Total Revenue The Industry The Firm Price Price S MC ATC P0 AVC P1 P D=MR D0 D1 Q1 Q0 Q Quantity Quantity Total Revenue
Perfect Competition P0 P1 P D1 Q1 Q0 Total Revenue Total Cost The Industry The Firm Price Price S MC ATC P0 AVC P1 P D=MR D0 D1 Q1 Q0 Q Quantity Quantity Total Revenue Total Cost
Perfect Competition P0 P1 P D1 Q1 Q0 Total Revenue Total Cost Loss The Industry The Firm Price Price S MC ATC P0 AVC P1 P D=MR D0 D1 Q1 Q0 Q Quantity Quantity Total Revenue Total Cost Loss
Perfect Competition P0 P1 P Q1 Q0 The Industry The Firm Price Price S MC ATC AVC P0 P1 P D=MR D1 D0 Q1 Q0 Q Quantity Quantity
Perfect Competition P0 P1 P Q1 Q0 Total Revenue The Industry The Firm Price Price S MC ATC AVC P0 P1 P D=MR D1 D0 Q1 Q0 Q Quantity Quantity Total Revenue
Perfect Competition P0 P1 P Q1 Q0 Total Revenue Total Cost The Industry The Firm Price Price S MC ATC AVC P0 P1 P D=MR D1 D0 Q1 Q0 Q Quantity Quantity Total Revenue Total Cost
Perfect Competition P0 P1 P Q1 Q0 Total Revenue Total Cost Loss The Industry The Firm Price Price S MC ATC AVC P0 P1 P D=MR D1 D0 Q1 Q0 Q Quantity Quantity Total Revenue Total Cost Loss
Quantity of chairs per hour TC FC VC MC AFC AVC ATC Perfect Competition Quantity of chairs per hour TC FC VC MC AFC AVC ATC 30 1 45 15 15.00 30.00 45.00 2 55 25 10.00 14.50 27.50 3 63 33 8.00 11.00 21.00 4 70 40 7.00 7.50 17.50 5 80 50 6.00 16.00 6 100 20.00 5.00 11.67 16.67 7 130 4.28 14.28 18.57
Perfect Competition 1 2 3 4 5 6 7 10 20 30 40 50 60 70 80 90 100 110 Costs in $s Quantity (chairs per hour)
Perfect Competition TC=Total Cost 1 2 3 4 5 6 7 10 20 30 40 50 60 70 80 90 100 110 TC TC=Total Cost Costs in $s Quantity (chairs per hour)
Perfect Competition TC=Total Cost 1 2 3 4 5 6 7 10 20 30 40 50 60 70 80 90 100 110 TC TC=Total Cost Costs in $s Quantity (chairs per hour)
Perfect Competition TC=Total Cost FC=Fixed Cost 1 2 3 4 5 6 7 10 20 30 40 50 60 70 80 90 100 110 FC TC FC=Fixed Cost TC=Total Cost Costs in $s Quantity (chairs per hour)
Perfect Competition TC=Total Cost FC=Fixed Cost 1 2 3 4 5 6 7 10 20 30 40 50 60 70 80 90 100 110 FC TC FC=Fixed Cost TC=Total Cost Costs in $s Quantity (chairs per hour)
Perfect Competition TC=Total Cost VC=Variable Cost FC=Fixed Cost 1 2 3 4 5 6 7 10 20 30 40 50 60 70 80 90 100 110 FC VC TC FC=Fixed Cost VC=Variable Cost TC=Total Cost Costs in $s Quantity (chairs per hour)
Perfect Competition TC=Total Cost VC=Variable Cost FC=Fixed Cost 1 2 3 4 5 6 7 10 20 30 40 50 60 70 80 90 100 110 FC VC TC FC=Fixed Cost VC=Variable Cost TC=Total Cost Costs in $s Quantity (chairs per hour)
Perfect Competition 1 2 3 4 5 6 7 10 20 30 40 50 60 Costs in $s Quantity (chairs per hour)
Perfect Competition MC=Marginal Cost 1 2 3 4 5 6 7 10 20 30 40 50 60 Costs in $s Quantity (chairs per hour)
Perfect Competition MC=Marginal Cost 1 2 3 4 5 6 7 10 20 30 40 50 60 Costs in $s Quantity (chairs per hour)
AFC=Average Fixed Cost MC=Marginal Cost Perfect Competition 1 2 3 4 5 6 7 10 20 30 40 50 60 AFC MC AFC=Average Fixed Cost MC=Marginal Cost Costs in $s Quantity (chairs per hour)
AFC=Average Fixed Cost MC=Marginal Cost Perfect Competition 1 2 3 4 5 6 7 10 20 30 40 50 60 AFC MC AFC=Average Fixed Cost MC=Marginal Cost Costs in $s Quantity (chairs per hour)
AFC=Average Fixed Cost AVC=Average Variable Cost MC=Marginal Cost Perfect Competition 1 2 3 4 5 6 7 10 20 30 40 50 60 AFC AVC MC AFC=Average Fixed Cost AVC=Average Variable Cost MC=Marginal Cost Costs in $s Quantity (chairs per hour)
AFC=Average Fixed Cost AVC=Average Variable Cost MC=Marginal Cost Perfect Competition 1 2 3 4 5 6 7 10 20 30 40 50 60 AFC AVC MC AFC=Average Fixed Cost AVC=Average Variable Cost MC=Marginal Cost Costs in $s Quantity (chairs per hour)
AFC=Average Fixed Cost AVC=Average Variable Cost Perfect Competition 1 2 3 4 5 6 7 10 20 30 40 50 60 AFC AVC ATC MC AFC=Average Fixed Cost AVC=Average Variable Cost ATC=Average Total Cost MC=Marginal Cost Costs in $s Quantity (chairs per hour)