1. Perfect Competition

2. Characteristics Large numbers MR=AR Homogeneous firms (can relax)
Price taker
MR=AR
Homogeneous firms (can relax)
Free Entry and Exit

3. What is Free Entry Not Necessarily Without Cost
Standards might still be Free Entry
Licenses that impose costs are not free
Usually the restrictor is government
Government might prevent exit (airlines)

4. The Representative Firm
Because all firms are the same it is only necessary to describe one of them
A set of cost curves describes the firm
Firms are added together to get the industry

5. Adjustment in the Short Run
The level of output
The supply curve
Profit & Losses
The shutdown decision

6. AJUSTMENT IN THE LONG RUN
Constant costs
Increasing costs
Decreasing costs

7. COMPETITIVE EQUILIBRIUM
What's so great about perfect competition

8. ECONOMIC RENT IN PERFECT COMPETITION
Representative firms and rent
Differential rent theory