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
The total demand consists of: 1. New owner demand and 2.A replacement demand The replacement demand tends to grow with the in the total stock with the consumers. Once a pe

State Property Regime Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Is the terms of trade (TOT) explained as the ratio of the value of exports to the value of imports? How does the TOT relate to the exchange rate? The terms of trade (TOT) is ex

Q. What is International Monetary Fund? International Monetary Fund: An international financial institution established after World War II with the goal of stabilizing and regu

MRTS and Marginal Productivity The change in output from change in labor equals:                     The change in output from change in capital equals

Hi, My Econ prof gives out a sample exam two days before we take the real exam. If I were to submit the sample exam to you, how long would it take to get the answers back?

Economics and Ethics : Morality and ethics are powerful motivations to behavior.  Thouh, economists suppose that rationality is a function of demonstrable self-interest.  That mean

what are the types of microeconomic analysis?

ref article :http://www.economist.com/news/finance-and-economics/21587795-if-congress-fails-lift-limit-americas-debts-consequences-are   a.assume that the debt ceiling crisis

please can you explainn what "down 0.1 percentage point on the quarter means"?