Short run equilibrium - perfect competition, Microeconomics

Short run equilibrium - Perfect competition:

In the short-run, the perfectly competitive firm maximizes its profit by producing output where MC=MR=P. This is shown in the diagram below (labeled Figure I) as output Q1. The firm’s total profit is represented by the shaded rectangle P, ABC which is obtained as total revenue (rectangle P,OQ,C) less total cost (rectangle A,OQ,B). It follows that, in the short-run, the firm in perfect competition is making positive economic profit, otherwise referred to as abnormal profit or supernormal profit.

254_Short run equilibrium - Perfect competition.png

In the above diagram, the short-run marginal cost, average total cost, average variable cost curves are labelled SMC, SAC, and SAVC respectively.

Posted Date: 1/3/2013 1:20:25 AM | Location : United States







Related Discussions:- Short run equilibrium - perfect competition, Assignment Help, Ask Question on Short run equilibrium - perfect competition, Get Answer, Expert's Help, Short run equilibrium - perfect competition Discussions

Write discussion on Short run equilibrium - perfect competition
Your posts are moderated
Related Questions
Question: You are required to perform an economic feasibility study for a project involving the setting up of an information system in a company. The table below summarises th

0.767 g of phosphorus and 0.650 g of chlorine were allowed to react. After the reaction was complete, all of the chlorine had been consumed, but 0.650 g of phosphorus remained. How

MEASURES TO PROMOTE GROWTH: In view of the recent global experience, the following steps need be taken to accelerate the rate of growth.  1) Mastering and constantly improv

•Create a demand schedule and a supply schedule for your product.. •Using these schedules, draw a demand curve and a supply curve using PowerPoint or Excel. Use these to determine

A spherical wave is reflected from a planar mirror sufficiently far from the wave origin so that the Fresnel approximation is satisfied. By regarding the spherical wave locally as

Who are the competitors in the jarred baby food market? What market share do they have? How do Heinz and Beech-Nut compete with one another? Are the barriers to entry high or low f

Cost in the Long Run Cost minimization with the Varying Output Levels -A firm's expansion path shows minimum cost combinations of labor and capital at each level of output.

Reasons for International Trade?

Igora''s pizzeria want to know if it should stay open this spring. Total Revenue will be $ 12,000 per week and Total Cost will be $ 18,000 per week. The fixed cost of running the b

marginal utility is applied on money or not