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ECON 103 Lecture Notes - Lecture 9: Market Power, Marginal Revenue, Demand Curve

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azurelizard859
13 Jan 2022
School
Simon Fraser University
Department
Economics
Course
ECON 103
Professor
Douglas Allen

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Document Summary

Because no one will have impact on the price, and price are offer by the market, therefore if anyone want to charge a penny higher than the price, no one will buy their things. Because consumer think of one competitive firm as a perfect substitute for every other price taking firm. And to show this on the graph, you draw it as this. will also equal to the marginal and average revenuer for the firm. Then you will get the following equations: mr = tr / q. When a firm consider the market price as its demand curve, the demand curve. When you see a table like this you know immediately this is a price taking firm. We need to understand this graph to do well during the exam. This is a price taking firm (which means we are in a perfect competitive market) The demand curve = price = marginal revenue.

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Related Questions

 
Perfectly competitive firms cannot individually affect the market price because: 
 
a) There is an infinite demand for their goods.

b) Market demand is flat (horizontal).

c) Their individual production is insignificant relative to the production of the industry.

d) The government exercises control over the market power of competitive firms.

In a competitive market, the actions of any single buyer or seller will:

a. Discourage entry by competitors,

b. Influence the profits of other firms in the market,

c. Have a negligible impact on the market price,

d. Both a and b are correct.

Competitive firms cannot individually affect market price because:
1. There is an infinite demand for their goods.

2. The market demand curve is flat or horizontal.

3. Their individual production is insignificant relative to the production of the industry.

4. The government exercises control over the market power of competitive firms.