### ch09

```Ch 9
• Perfect Competition
Characteristics
•
•
•
•
Fragmented
Undifferentiated products
Implications
• Price taker
• Law of one price
• Zero-profit in the long run
Economic Profit
• Economic profit vs account profit
(Figure continues on next slide)
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-01
FIGURE 9-1 Profit Maximization by a Price-Taking Firm
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-01 continued
FIGURE 9-1 (Continued)
Costs
STC ( Q )  SFC  NSFC  TVC ( Q ),
 SFC , WHEN Q  0
WHEN Q  0
Supply curve
P  MR ( Q )  MC ( Q )

 AR ( Q )  P  ANSC  AVC ( Q )  NSFC / Q
Q  0 , IF
TR ( Q )  NSFC  TVC ( Q ), : Q  0
AR ( Q )  P  AVC ( Q )  NSFC / Q
When fixed costs are all sunk
P  MR ( Q )  MC ( Q )

 AR ( Q )  P  AVC ( Q )
Q  0 , IF
TR ( Q )  TVC ( Q ), : Q  0
AR ( Q )  P  AVC ( Q )
Whose fixed costs are all sunk : P=0.05 q=25,
loss=TFC+(avc25-P)25 ;q=0,;loss=TFC
FIGURE 9-2 Short-Run Supply Curve for a Price-Taking Firm
FIGURE 9-3 Short-Run Supply Curve for a Firm with
Nonsunk Fixed Costs
P=0.15,q=35, 則loss=TFC+35(ansc35-0.15)
q=0,loss=TFC
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-04
FIGURE 9-4 Supply Curve for Learning-By-Doing Exercise 9.2
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-05
FIGURE 9-5 Supply Curve for a U.S. Corn Farmer
SHORT-TUN MARKET SUPPLY
CURVE
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-06
FIGURE 9-6 Short-Run Market Supply Curve
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-07
FIGURE 9-7 Supply Curves for Copper in 2000
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-08
FIGURE 9-8 Perfectly Inelastic and Perfectly Elastic Supply Curves
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-09
FIGURE 9-9 Short-Run Equilibrium
Comparative Static
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-10
FIGURE 9-10 Comparative Statics Analysis: Increase in the Number
of Firms
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-11
FIGURE 9-11 The Impact of a Shift in Demand on Price Depends
on the Price Elasticity of Supply
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-12
FIGURE 9-12 The Short-Run Supply Curve for Roses
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-13
FIGURE 9-13 The Price of Electricity in the Nord Pool, 1999
Long-run output and plant-size
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-14
FIGURE 9-14 Long-Run Output and Plant Size Adjustment by a
Price-Taking Firm
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-15
FIGURE 9-15 The Firm’s Long-Run Supply Curve
Free entry and long-run equilibrium
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-16
FIGURE 9-16 Long-Run Equilibrium in a Perfectly
Competitive Market
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-17
FIGURE 9-17 Relationship Between Number of Internet Service
Providers and the Size of the Market in 1998
Long-run market supply curves
• Input prices changes
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-18
FIGURE 9-18 Long-Run Industry Supply Curve
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-19
FIGURE 9-19 Spot Price to Charter a Supertanker, January
1973-March 1976
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-20
FIGURE 9-20 The Collapse of the Oil Tanker Market, 1973–1975
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-21
FIGURE 9-21 Long-Run Industry Supply Curve in an
Increasing-Cost Industry
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-22
FIGURE 9-22 Economic Rent
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-23
FIGURE 9-23 Producer Surplus for a Price-Taking Firm
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-24
FIGURE 9-24 Market-Level Producer Surplus: Number of Firms
in the Industry is Fixed
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-25
FIGURE 9-25 Producer Surplus in the World Copper Market
Besanko & Braeutigam/Microeconomics: An Integrated Approach
Chapter 9, Figure 09-26
FIGURE 9-26 Producer Surplus at the Long-Run Equilibrium in an
Increasing-Cost Industry
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