Social Sciences and History / Unit 13 SSH 1233 short lesson, about 20 seconds
The Price Taker and MR = MC
Captions available
The idea
In perfect competition many sellers offer identical products with easy entry and exit, so each firm is a price taker: it accepts the market price. Total revenue rises at a constant rate. Profit is highest where marginal revenue, which equals price here, equals marginal cost.
In practice
Market structure: sellers, entry, product type.
Where people slip
Price above average cost, profit; below, loss.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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