What you’ll learn to do: calculate and graph the firm’s fixed, variable, average, marginal, and total costs.
In this outcome, we learn how perfectly competitive firms make their one important decision of how much to produce based on the firm’s costs.
The specific things you’ll learn in this section include:
- Calculate and graph the firm’s average, marginal and total revenues
- Determine the profit maximizing output level and price using graphs and demand schedules; is able to calculate and graphically illustrate where marginal revenue equals marginal costs
The learning activities for this section include:
- Reading: How Perfectly Competitive Firms Make Output Decisions
- Self Check: Costs and Revenues in a Perfectly Competitive Market
Take time to review and reflect on each of these activities in order to improve your performance on the assessment for this section.