What you’ll learn to do: understand the difference between the firm and the industry

The basic idea behind perfect competition is that there are lots of sellers selling almost the same thing, and there are also lots of buyers wanting those products. In this section, you’ll understand more about the differences between a perfectly competitive firm and a perfectly competitive industry. While a competitive market determines the equilibrium point by staying in tune with the supply and demand curves, a perfectly competitive market does not have that luxury. A perfectly competitive market must accept the price point and must only decide how much to sell.

The specific things you’ll learn to do in this section include:

• Explain and illustrate the differences between the demand curve for a perfectly competitive firm and that for a perfectly competitive industry

LEARNING ACTIVITIES

The learning activities for this section include:

• Reading: Perfect Competition: A Model
• Reading: Price and Revenue in a Perfectly Competitive Industry and Firm
• Self Check: Perfectly Competitive Firms and Industries

Take time to review and reflect on each of these activities in order to improve your performance on the assessment for this section.