Equilibrium of a Competitive Firm
Part 2 — how a price taker chooses its output, when it earns profit, normal profit or a loss, and when it shuts down.
In this lesson you will
- State the conditions of a competitive firm's short-run equilibrium
- Show supernormal profit, normal profit and loss with diagrams
- Identify the break-even and shut-down points and explain long-run normal profit