1. Chapter Seventeen:
Markets Without Power

2. Perfect Competition

3. Figure 17.1: The Demand Curve for a Perfectly Competitive Seller
In a perfectly competitive market, each seller is able to sell all they want at the market equilibrium price. But at any price higher than the equilibrium price, a seller is not able to sell anything at all as buyers can simply obtain the same good or service elsewhere for a lower price.

4. Profit Maximization Under Perfect Competition

5. Figure 17.2: Total Revenues
Total revenues increase linearly with the quantity sold given that the price for each unit (in this case, bushels of corn) is constant in a perfectly competitive market.

6. Table 17.1: Profit Maximization, Based on Analysis of Total Costs and Total Revenues

7. Figure 17.3: Profit Maximization, Based on Analysis of Total Costs and Total Revenues
Profit maximization occurs at the level of production where the difference between total revenues and total costs is greatest.

8. Table 17.2: The Marginal Cost and Marginal Revenue of Corn Production

9. Figure 17.4: Profit Maximization, Based on Marginal Analysis
Profit maximization occurs at the level of production where the marginal cost rises to the level of marginal revenues (equal to price in a perfectly competitive market).

10. Figure 17.5: The Impact of an Increase in Supply as Farmers Enter the Corn Market
An increase in supply, as more farmers enter the market, will lower the equilibrium price (from $4.00 per bushel to P1 ) and increase the quantity sold.

11. Figure 17.6: The Relationship between Market Conditions and Individual Production Decisions
As more farmers enter the market, the equilibrium price will fall, and the economic profits of each individual farmer will decrease.

12. Losses and Exit

13. Table 17.3: Impact of a Decrease in Corn

14. Appendix: A Formal Model of Perfect Competition

15. Figure 17.7: The Relationship Between Average Total Costs and Marginal Costs
When average total cost is at its lowest point, it is equal to marginal cost.

16. Figure 17.8: The Relationship Between Average Total Costs, Marginal Costs, and Average Variable Costs
When average variable cost is at its lowest point, it is also equal to marginal cost.

17. Figure 17.9: The Relationship Between Cost Curves and Areas of Total Costs, Fixed Costs, and Total Variable Costs
We can use the ATC and AVC curves to determine the areas of total costs, fixed costs, and variable costs for any level of production.

18. Figure 17.10: Positive Economic Profits
When price is greater than average total costs, a firm is making economic profits.

19. Figure 17.11: Zero Economic Profits—The Perfectly Competitive Market Equilibrium
At the perfectly competitive market equilibrium, price equals ATC and each firm is making zero economic profits.

20. Figure 17.12: The Decision to Produce with Losses
In the short run, a firm will continue to produce as long as revenues are sufficient to cover its variable costs.