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For each unit, the amount that you get, which is that marginal unit, that's also how much itĬosts you to produce it, now remember, when we're

Happens when you produce a quantity where your average total cost is the same as your marginal revenue. And so, their marginal revenue curve, it would just be a horizontal line that you see right over there, and zero economic profit It in many, many videos, in a perfectly competitive market, the firms are price takers, that price is set by thatĮquilibrium point between the supply and demand curves, and the firms just take that.

Perfective competitive market are going to be operatingĪt zero economic profit, and you can see thatĮxample right over here. Perfectly competitive market, the firms that operate in that Now, in previous videos, we talked about that in the long run, in a Or you can build factories, in the long run. Or, another way to think about it is, in the long run, fixed costsĪctually become variable, you can shutter factories, Is the time span where firms can enter and exit the market. Gonna focus on the long run, and remember the long run

Let's dig a little bit more into analyzing perfectlyĬompetitive markets, and in particular we're