Microeconomics · free preview
The Price Taker
Market structure ranges along sellers, product sameness and entry barriers, and when a firm is small, standard and unblocked it takes the market price as given.
1. Grading market structures
Grading market structures
2. Why the small are powerless
Why the small are powerless
3. The two panels, always two panels
The two panels, always two panels
4. Where competition is a good approximation
Where competition is a good approximation
5. The flat little d
Why does an individual perfectly competitive firm face a horizontal demand curve at the market price?
6. Reading the two panels
In the market panel, a health study praising honey shifts demand right and raises the market price from 24 to 28 dollars. What happens in the firm panel?
7. The negligible share
A market sells 72,000 jars of honey a year, produced by 2,000 identical beekeepers. Compute each beekeeper's yearly output in jars and write the number.
8. Why the demand line lies flat
Why does an individual perfectly competitive firm face a horizontal demand curve at the market price?
9. What the firm takes as given
In the two-panel diagram of a competitive market and a competitive firm, which object does the individual firm treat as exogenous?
10. The beekeeper's share
A market sells 96,000 jars of honey a year, produced by 3,000 identical beekeepers each selling the same amount. Compute each beekeeper's sales in jars, and write the number.
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