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Perfect Competition (Breaking Even (marginal cost equals average total…

- - - - profit max reveals MR is the same price.
        
        produces the 1st unit, the 2nd unit, the 3rd unit to the 5th unit until the 6th unit it will shut down
- - - - Some fixed costs might not be sunk in the long run.
      - For example, in the short run, you can produce output but cannot avoid fized capital costs
- - - - no consumers will move to other seller hence seller keep selling standard product at fixed by market forces of demand and supply
- - - - incentives for more firm to enter the market which increases supply which decreases equilibrium price to long position AC=AR
    - - firm leaves the market which reduces the supply which increases the market equilibrium price to long run position of AR=AC normal profit
- - - - homogenous; all producers of a good sell the same product
        
        barriers to entry; no barriers to enter and exit the market
        
        price takers; all consumer and producers have perfect information, everyone knows the price of the products the demand and supply
    - - calculated by Total Revenue – Total Costs
        
        known as abnormal profit
        
        JP Morgan Chase & Co. In 2015, J P Morgan Chase made profits of $24.4 billion.
  - - - occurs when AR=ATC