Perfect Competition Storyboard

Perfect competition storyboard

By Taylor Shavers Collin College, Econ 2302 Professor Meena Beeri

Profit is the motivation behind competive firms

Characteristics of Perfect Competition

1. There are many sellers

2. Many firms can enter and leave easily 3. Sellers have similar/identical products 4. Sellers are price takers

perfectly elastic demand curve by single firm

A firm in a competitive market does not control the price. The price is determined by the market.

Profit Maximization

1. Profits will be at the highest when marginal revenue equals the marginal cost.2. If the market price is higher than the average cost at the highest quantity of output, this means the firm is profitable.3. Always compare your Total Revenue with your Opportunity Cost

Short-Run Profit Maximization

If marginal revenue is greater than the marginal cost, the firm is not maximizing their profits, but producing more units will increase their profit If marginal revenue is less than the marginal cost, the firm is not maximizing profits, but producing less units will increase their profits

Industries close to perfect competition: Cocoa-Cola Company vs. Dr. Pepper Shein vs. Fashion Nova Xbox vs. Playstation Farmers all competing to produce agricultural crops