Market
Price
Market quantityWhere demand equals supply
Number of firms
Perfect Competition App
Firms are price takers. In the short run the number of firms is fixed. In the long run firms enter or leave until profit is zero. Set the cost function, demand and number of firms, then choose a firm's output or jump to an equilibrium.
Cost function
TC = FC + c·q + d·q²
AC = FC/q + c + d·q
MC = c + 2d·q
$
$
Market demand
P = a − bQ, where Q is market quantity
Number of firms
Fixed in the short run. Entry and exit change it in the long run.
Market
Firm
Firm
A price taker: it takes the market price as given, and the other firms produce their best output.
- Profit
- Price
- Revenue
- Total cost
- Average cost
- Marginal cost