文档介绍：Chapter 8
Profit Maximization petitive Supply
1
Chapter 1
Topics to be Discussed
petitive Markets
Profit Maximization
Marginal Revenue, Marginal Cost, and Profit Maximization
Choosing Output in the Short-Run
2
Chapter 1
Topics to be Discussed
petitive Firm’s Short-Run Supply Curve
Short-Run Market Supply
Choosing Output in the Long-Run
The Industry’s Long-Run Supply Curve
3
Chapter 1
petitive Markets
Characteristics of petitive Markets
1) Price taking
2) Product homogeneity
3) Free entry and exit
4
Chapter 1
petitive Markets
Price Taking
The individual firm sells a very small share of the total market output and, therefore, cannot influence market price.
The individual consumer buys too small a share of industry output to have any impact on market price.
5
Chapter 1
petitive Markets
Product Homogeneity
The products of all firms are perfect substitutes.
Examples
Agricultural products, oil, copper, iron, lumber
6
Chapter 1
petitive Markets
Free Entry and Exit
Buyers can easily switch from one supplier to another.
Suppliers can easily enter or exit a market.
7
Chapter 1
petitive Markets
Discussion Questions
What are some barriers to entry and exit?
Are all petitive?
When is a market petitive?
8
Chapter 1
Profit Maximization
Do firms maximize profits?
Possibility of other objectives
Revenue maximization
Dividend maximization
Short-run profit maximization
9
Chapter 1
Profit Maximization
Do firms maximize profits?
Implications of non-profit objective
Over the long-run investors would not support pany
Without profits, survival unlikely
10
Chapter 1