Ch 9 Perfect Competition

Characteristics Fragmented Undifferentiated products Perfect information about prices equal Access to resources

Implications Price taker Law of one price Zero-profit in the long run

Economic Profit Economic profit vs account profit

FIGURE 9-1 Profit Maximization by a Price-Taking Firm Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure (Figure continues on next slide)

FIGURE 9-1 (Continued) Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure continued

Costs

Supply curve

When fixed costs are all sunk

FIGURE 9-2 Short-Run Supply Curve for a Price-Taking Firm Whose fixed costs are all sunk : P=0.05 q=25, loss=TFC+(avc25-P)25 ;q=0,;loss=TFC

FIGURE 9-3 Short-Run Supply Curve for a Firm with Nonsunk Fixed Costs P=0.15,q=35, 則 loss=TFC+35(ansc ) q=0,loss=TFC

FIGURE 9-4 Supply Curve for Learning-By-Doing Exercise 9.2 Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-04

FIGURE 9-5 Supply Curve for a U.S. Corn Farmer Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-05

SHORT-TUN MARKET SUPPLY CURVE

FIGURE 9-6 Short-Run Market Supply Curve Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-06

FIGURE 9-7 Supply Curves for Copper in 2000 Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-07

FIGURE 9-8 Perfectly Inelastic and Perfectly Elastic Supply Curves Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-08

FIGURE 9-9 Short-Run Equilibrium Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-09

Comparative Static

FIGURE 9-10 Comparative Statics Analysis: Increase in the Number of Firms Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-10

FIGURE 9-11 The Impact of a Shift in Demand on Price Depends on the Price Elasticity of Supply Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-11

FIGURE 9-12 The Short-Run Supply Curve for Roses Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-12

FIGURE 9-13 The Price of Electricity in the Nord Pool, 1999 Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-13

Long-run output and plant-size adjustments

FIGURE 9-14 Long-Run Output and Plant Size Adjustment by a Price-Taking Firm Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-14

FIGURE 9-15 The Firm’s Long-Run Supply Curve Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-15

Free entry and long-run equilibrium

FIGURE 9-16 Long-Run Equilibrium in a Perfectly Competitive Market Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-16

FIGURE 9-17 Relationship Between Number of Internet Service Providers and the Size of the Market in 1998 Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-17

Long-run market supply curves Input prices changes

FIGURE 9-18 Long-Run Industry Supply Curve Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-18

FIGURE 9-19 Spot Price to Charter a Supertanker, January 1973-March 1976 Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-19

FIGURE 9-20 The Collapse of the Oil Tanker Market, 1973–1975 Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-20

FIGURE 9-21 Long-Run Industry Supply Curve in an Increasing-Cost Industry Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-21

FIGURE 9-22 Economic Rent Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-22

FIGURE 9-23 Producer Surplus for a Price-Taking Firm Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-23

FIGURE 9-24 Market-Level Producer Surplus: Number of Firms in the Industry is Fixed Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-24

FIGURE 9-25 Producer Surplus in the World Copper Market Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-25

FIGURE 9-26 Producer Surplus at the Long-Run Equilibrium in an Increasing-Cost Industry Besanko & Braeutigam/Microeconomics: An Integrated Approach Chapter 9, Figure 09-26