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- economic profit will lure new firms into the industry. some entrants will be newly created firms, others will shift from less prosperous industries
- market supply increases

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a state of the economy in which production represents consumer preferences; in particular, every good or service is produced up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing.

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Average revenue is the revenue generated per unit of output sold. It plays a role in the determination of a firm's profit. Per unit profit is average revenue minus average (total) cost. A firm generally seeks to produce the quantity of output that maximizes profit.

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- P= Min. ATC = MR
-goods are produced in the least costly way
-L-R: firms produce

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All economic participants are considered to be price-takers in a market of perfect competition, or one in which all companies sell an identical product, there are no barriers to entry or exit, every company has a relatively small market share, and all buyers have full information of the market.

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- MR = MC and price and minimum ATC are equal
- Economic profit is 0; the industry is in equilibrium or at rest because there is no tendency for firms to enter or to leave

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a type of market structure showing some but not all features of competitive markets. Forms of imperfect competition include: ... Monopolistic competition, in which there are many sellers producing highly differentiated products.

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-the amount of output the firm will supply at each price
-represented at the MC Curve of a firm

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- Entry and Exit only
the only long run adjustment in our graphical analysis in caused by entry and exit
- Identical Costs
all firms have identical cost curves
- Constant-cost industry
this means that the entry and exit of firms does not affect resource prices
Goals?
- firms seek profits and shun losses
- under pure competition, Firms can enter and exit as they please

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-firm will maximize profit/ minimize loss by producing where MR= MC
- rule will be = fractional level of output, so the firm should produce last complete unit of output for so

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the change in total revenue or the extra revenue that results fro selling one more unit of output

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- where firms at an output makes a normal profit but not an economic profit

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TR is found by multiplying price by the corresponding quantity the firm can sell

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a term that describes a market that has a broad range of competitors who are selling the same products. It is often referred to as perfect competition

Pure monopoly
a market structure where one company is the single source for a product and there are no close substitutes for the product available.Pure monopolies are relatively rare. In order for a provider to maintain a pure monopoly, there must be barriers preventing competitors from entering the market.

monopolistic competition
a type of imperfect competition such that many producers sell products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes.

Oligopoly
a market structure in which a small number of firms has the large majority of market share. An oligopoly is similar to a monopoly, except that rather than one firm, two or more firms dominate the market.

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price per unit to the purchaser is also revenue is also revenue per unit, or average revenue, to the seller