A Second Look at Firm Behavior Under Perfect Competition

Martin Kolmar ()
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Martin Kolmar: University of St. Gallen

Chapter 9 in Principles of Microeconomics, 2017, pp 201-220 from Springer

Abstract: Abstract This chapter covers … how profit-maximizing firms behave in competitive markets (behavioral foundation of the supply function). how the supply function is related to marginal and average cost functions and what this says about the informational demands and effective organization of firms. the technological prerequisites for the functioning of competitive markets. how competition drives profits to zero and why this is not bad.

Keywords: Perfect Competition; Supply Function; Average-cost Curve; Zero Profit; Marginal Cost Function (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sptchp:978-3-319-57589-6_9

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DOI: 10.1007/978-3-319-57589-6_9

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