Exploring Economics
Eighth Edition
Learning Objectives
- Define a perfectly competitive market.
- Describe and explain why a perfectly competitive firm faces a horizontal firm demand curve.
- Describe and explain how price and output are determined in a perfectly competitive market.
- Describe and explain short-run economic profits and losses.
- Explain why firms may enter and exit the market.
- Describe and explain how the shape of the long-run supply curve depends on the extent to which input costs change with the entry or exit of firms in the industry.