Perfect Competition (AQA A-Level Economics): Flashcards

Theoretical benchmark to measure real market performance

Self-interest in competitive markets promotes public good

Firm that must accept ruling market price from supply/demand

Produce where $MR = MC$ (marginal revenue = marginal cost)

Abnormal (supernormal) profits when price exceeds ATC

Normal profit only (total revenue = total cost)

$P = ATC = MC = MR$ (price = avg total cost = marginal cost)

Production at lowest cost per unit (minimum point on ATC)

$P = MC$ in all markets (price equals marginal cost)

Price competition only (no advertising, branding, etc.)