Questions and Answers
How is profit visually represented for a perfectly competitive firm?
Profit is visually represented by the intersection of the marginal revenue curve and the marginal cost curve at the profit maximizing quantity.
What is the equation for profit on a per unit basis for a perfectly competitive firm?
Profit equals price minus average total cost times quantity.
What determines the firm's long run supply curve?
The firm's long run supply curve is determined by its marginal cost curve above the average total cost curve.
What is the condition for a firm to exit the market in a perfectly competitive market?
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What is the equation for profit in terms of total revenue and total cost for a perfectly competitive firm?
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