ECO100Y5 Chapter Notes - Chapter 9: Average Variable Cost, Marginal Revenue, Perfect Competition
sophiapham192 and 37296 others unlocked
53
ECO100Y5 Full Course Notes
Verified Note
53 documents
Document Summary
Chapter 9 reading notes a market is said to have a competitive structure when its firms have little or no market power. Assumptions of perfect competition: all the firms in the industry sell an identical product. Economists say that the firms sell a homogenous product: consumers know the nature of the product being sold and the prices charged by each firm. Because everyone has the same and equal demand of their products. Total, average, and marginal revenue: tr - total revenue - total amount received by the firm from the sale of a product. If q units are sold at p dollars. Tr = p(q). p=bq-a. this equation is like the y=mx+b formula. This is in the notebook: ar - average revenue - the amount of revenue per unit sold. It is equal to total revenue divided by the number of units sold and is equal to the price at which the product is sold.