Production, Cost, and the Perfect Competition Model

This study guide covers production, costs, and perfect competition. It examines factors of production, production measures (TP, MP, AP), and returns to scale. Short-run and long-run costs are explored, including fixed costs (FC), variable costs (VC), total cost (TC), average and marginal costs (ATC, AVC, AFC, MC), and the relationship between cost curves. The guide also discusses types of profit (accounting, economic, normal), profit maximization (MR=MC), and short-run/long-run firm decisions. Finally, it details the characteristics and market equilibrium of perfect competition.