Market structures (OCR A-Level Economics): Flashcards

Many firms, identical products, free entry/exit, perfect knowledge

Supernormal profits or losses possible

Normal profits only

Minimum profit to keep firm in business; $TR = TC$

Firm accepts market price, cannot influence it

All firms sell identical products

None - free entry and exit

Produce where $MC = MR$

$P > ATC$

$P < ATC$

$P = ATC$ (normal profit)

$P = MC$

Production at minimum $AC$

Perfectly elastic (horizontal)

New firms enter, supply increases, price falls