University of Hawai‘i at Mānoa Department of Economics ECON 130 (003): Principles of Economics (Micro) Gerard Russo Lecture.

Slides:

Advertisements

Similar presentations

Prices and Output decisions for

Advertisements

Competitive Markets.

Unit 3.2 Perfect Competition Review. $ Cost and Revenue MC AVC ATC 14 Should the firm produce? What output should the firm produce? What is.

University of Hawai‘i at Mānoa Department of Economics ECON 130 (003): Principles of Economics (Micro) Gerard Russo Lecture.

Monopolistic competition Is Starbuck’s coffee really different from any other?

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 11: Managerial Decision in Competitive Markets.

University of Hawai‘i at Mānoa Department of Economics ECON 130 (003): Principles of Economics (Micro) Gerard Russo Lecture.

Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Perfectly competitive market u Many buyers and sellers u Sellers offer same goods.

8 Perfect Competition  What is a perfectly competitive market?  What is marginal revenue? How is it related to total and average revenue?  How does.

FIRMS IN COMPETITIVE MARKETS. Characteristics of Perfect Competition 1.There are many buyers and sellers in the market. 2.The goods offered by the various.

Managerial Economics & Business Strategy

Firms in Competitive Markets

Perfect Competition Principles of Microeconomics Boris Nikolaev

Lesson 3-6 Short Run Equilibrium and Short Run Supply in Perfect Competition Short Run Equilibrium equals output level where MR = MC Firm will stay at.

Competitive Markets for Goods and Services

Structures Market Structures Perfect Competition.

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 9 Lecture 11 AND 12 PURE COMPETITION.

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Pure Competition Chapter 9.

Perfect Competition Topic 5. Characteristics Pure Competition large number of sellers & buyers homogenous (identical) products low barriers to entry (free.

The Model of Perfect Competition Microeconomics - Dr. D. Foster.

Pure Competition Chapter 10. Chapter 23 Table 23.1 Four types of Market Organization.

Copyright 2008 The McGraw-Hill Companies Pure Competition.

Pure Competition 6 LECTURE Market Structure Continuum FOUR MARKET MODELS Pure Competition.

Firms in Competitive Markets Chapter 14 Copyright © 2001 by Harcourt, Inc. All rights reserved. Requests for permission to make copies of any part of the.

Micro Ch 21 Presentation 2. Profit Maximization in the SR Because the purely competitive firm is a price taker, it can maximize its economic profit/minimize.

UNIT 6 Pricing under different market structures

Perfect Competition Modules 58, 59, and 60. Assumptions 1.Many Firms: Identical Products 2.No Entry/Exit restrictions 3.New vs Old firms have no advantages.

Production Decisions in a Perfectly Competitive Market Chapter 6.

Short-run costs and output decisions 8 CHAPTER. Short-Run Cost Total cost (TC) is the cost of all productive resources used by a firm. Total fixed cost.

Firms in Competitive Markets Chapter 14 Copyright © 2004 by South-Western,a division of Thomson Learning.

# McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Pure Competition 7.

Perfectly Competitive Markets Microeconomics. Put mod 57 stuff here  Consumer Surplus is ….  when a consumer pays of price LESS than their maximum willingness.

Perfect Competition Econ 10 Holmes Road Map Costs Graphs Definition Tables.

The Production Decisions of Competitive Firms Alternative market structures: perfect competition monopolistic competition oligopoly monopoly.

1 ECONOMICS 200 PRINCIPLES OF MICROECONOMICS Professor Lucia F. Dunn Department of Economics.

Chapter 14 Firms in Competitive Markets © 2002 by Nelson, a division of Thomson Canada Limited.

Chapter 14 Firms in Competitive Markets. What is a Competitive Market? Characteristics: – Many buyers & sellers – Goods offered are largely the same –

Perfect Competition in the Short Run and Long Run

Perfect Competition part III Short Run & Long Run Supply Curves Chapter 14 completion.

Economic Analysis for Business Session XI: Firms in Competitive Market Instructor Sandeep Basnyat

Principles of Microeconomics : Ch.14 First Canadian Edition Perfect Competition - Price Takers u The individual firm produces such a small portion of the.

KRUGMAN'S MICROECONOMICS for AP* Graphing Perfect Competition Margaret Ray and David Anderson Micro: Econ: Module.

TC, TVC, TFC TFC Q1 Q2 Q MC ATC AVC AFC Q.

Copyright © 2011 Cengage Learning 14 Firms in Competitive Markets.

KRUGMAN'S MICROECONOMICS for AP* Introduction to Perfect Competition Margaret Ray and David Anderson Micro: Econ: Module.

Essential AP Microeconomics Formulas. AVERAGE PRODUCT (AP)

Unit 3: Costs of Production and Perfect Competition

Competition Chapter 8. Recall: Producer Decision-making Optimal behavior: choose the right input combination or right production level Goal: –Max production.

Costs and supply. Perfect competition Lectures/DeianDoykov/International University/Foundation Year/Semester

Micro Chapter 21-Presentation 3. Efficiency Productive Efficiency: Price = Minimum ATC Allocative Efficiency: Price = MC Pure Competition Has Both in.

 Many small firms  Standardized product  No need to advertise  “Price takers”  Free entry and exit  Perfectly elastic demand  Average revenue.

Individual Firm Quantity (firm) 0 Price Entire Market Quantity (market) Price 0 DDemand, 1 SShort-run supply, 1 P 1 ATC P 1 1 Q A MC AVC In a Competitive.

ECON107 Principles of Microeconomics Week 13 DECEMBER w/12/2013 Dr. Mazharul Islam Chapter-12.

UBEA 1013: ECONOMICS 1 CHAPTER 5: MARKET STRUCTURE: PERFECT COMPETITION 5.1 Characteristic 5.2 Short-run Decision: Profit Maximization 5.3 Short-run Decision:

University of Hawai‘i at Mānoa Department of Economics ECON 130 (003): Principles of Economics (Micro) Gerard Russo Lecture.

Fig. 1 The Competitive Industry and Firm Ounces of Gold per Day Price per Ounce D $400 S Market Demand Curve Facing the Firm $400 Firm 1.The intersection.

CH7 : Output, Price, and Profit : The Importance of Marginal Analysis Asst. Prof. Dr. Serdar AYAN.

Copyright 2008 The McGraw-Hill Companies 21-1 Four Market Models Pure Competition Profit Maximization in the Short-Run Marginal Cost and Short-Run Supply.

ECONOMICS: Principles and Applications 3e HALL & LIEBERMAN © 2005 Thomson Business and Professional Publishing Perfect Competition.

Copyright McGraw-Hill/Irwin, 2002 Pure Competition 23 C H A P T E R.

University of Hawai‘i at Mānoa Department of Economics ECON 130 (003): Principles of Economics (Micro) Gerard Russo Lecture.

University of Hawai‘i at Mānoa Department of Economics ECON 130 (003): Principles of Economics (Micro) Gerard Russo Lectures.

9 March 2004ECON 130 (003) Spring University of Hawai‘i at Mānoa Department of Economics ECON 130 (003): Principles of Economics (Micro)

Output Input; ceteris paribus The law of diminishing marginal return.

KRUGMAN'S MICROECONOMICS for AP* Introduction to Perfect Competition Margaret Ray and David Anderson Micro: Econ: Module.

Mr. Bernstein Module 59: Graphing Perfect Competition October 2017

Less competition Perfect Competition Monopolistic Competition

Mr. Bernstein Module 59: Graphing Perfect Competition October 2018

(1) (C) P ($/unit) (A) P (B) P P1 P1 P1 TR TC q1 Q q1 Q q1 Q (2) Q P P

Presentation transcript:

University of Hawai‘i at Mānoa Department of Economics ECON 130 (003): Principles of Economics (Micro) Gerard Russo Lecture #19 Tuesday, March 16, 2004

ANNOUNCEMENTS REVIEW SESSION Thursday, March 18, 2004, 4:30-5:30 PM BIL 152 MID-TERM EXAMINATION #2 Tuesday, March 30, 2004, 12:00-1:15 PM BIL 152

LECTURE 19 The Perfectly Competitive Firm in the Short-Run: Short-Run Firm Supply Short-Run vs. Long-Run The Perfectly Competitive Industry in the Short-Run: Short-Run Industry Supply

Profit Maximization $/Q Q MC ATC AVC 0 A E B C Q* P0P0 F TR equals the area of rectangle 0P 0 FQ*. TC equals the area of rectangle 0ABQ*. Therefore, Profits equal the area of AP 0 FB. TVC equals the area of rectangle 0ECQ*. TFC equals the area of rectangle EABC. Economic Profit

Profit Maximization $/Q Q MC ATC AVC 0 E B C Q0Q0 Firm demand: P=AR=MR P0P0 TR equals the area of rectangle 0P 0 BQ 0. TC equals the area of rectangle 0P 0 BQ 0. Therefore, Profits equal zero. TVC equals the area of rectangle 0ECQ 0. TFC equals the area of rectangle EP 0 BC.

Profit Maximization $/Q Q MC ATC AVC 0 E B C Q0Q0 Firm demand: P=AR=MR P0P0 F A Are the firm’s profits positive, negative or zero? Should the firm shut-down or continue to operate? Economic Loss

Firm Supply $/Q Q MC ATC AVC P 0 0 P 2 P 1 Q0Q0 P 1 =AR 1 =MR 1 P 0 =AR 0 =MR 0 P 2 =AR 2 =MR 2 Q1Q1 Q2Q2

Quantity (milllions) quantity (thousands) $/q Perfectly Competitive Firm Perfectly Competitive Industry MC ATC AVC Supply Demand PEPE QEQE qEqE P E =AR=MR What is the level of Firm Profit? Are Profits Positive, Negative, or Zero? 0

Quantity (milllions) quantity (thousands) $/q Perfectly Competitive Firm Perfectly Competitive Industry MC ATC AVC Supply Demand PEPE QEQE qEqE P E =AR=MR What is the level of Firm Profit? Are Profits Positive, Negative, or Zero? 0

Quantity (milllions) quantity (thousands) $/q Perfectly Competitive Firm Perfectly Competitive Industry MC ATC AVC Supply Demand PEPE QEQE qEqE P E =AR=MR What is the level of Firm Profit? Are Profits Positive, Negative, or Zero? 0

Quantity (milllions) quantity (thousands) $/q Perfectly Competitive Firm Perfectly Competitive Industry MC ATC AVC Supply Demand PEPE QEQE qEqE P E =AR=MR What is the level of Firm Profit? Are Profits Positive, Negative, or Zero? 0

Q (milllions) quantity (thousands) $/q Perfectly Competitive Firm Perfectly Competitive Industry MC ATC AVC Supply D2D2 P2P2 Q 2 =Σq i q2q2 P 2 =AR 2 =MR 2 Industry Supply is the Summation of the Firms’ Supply 0 P 3 =AR 3 =MR 3 D3D3 P3P3 D1D1 P 1 =AR 1 =MR 1 P1P1 q1q1 q3q3 Q 1 =Σq i Q 3 =Σq i