Authors libby rittenberg 474

benefit of an additional unit of output is just equal to the marginal cost.
This fact has an important implication: over a wide range of output, the
firm’s marginal cost curve is its supply curve.

Price and Revenue
Each firm in a perfectly competitive market is a price taker; the
equilibrium price and industry output are determined by demand and
supply. Figure 9.3 "The Market for Radishes" shows how demand and
supply in the market for radishes, which we shall assume are produced
under conditions of perfect competition, determine total output and price.
The equilibrium price is $0.40 per pound; the equilibrium quantity is 10
million pounds per month.
Figure 9.3 The Market for Radishes

Price and output in a competitive market are determined by demand
and supply. In the market for radishes, the equilibrium price is $0.40
per pound; 10 million pounds per month are produced and purchased
at this price.
Attributed to Libby Rittenberg and Timothy Tregarthen
Saylor URL: />
Saylor.org

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