MJ Industries

In the realm of economics, understanding the concepts of long-run equilibrium and supply is crucial. This article aims to provide a comprehensive explanation of these concepts, particularly in the context of perfect competition. Perfect Competition Perfect competition is a market structure characterized by many buyers and sellers. In such a market, each firm is a price taker, meaning no single firm can influence the price of goods. The goods offered by various sellers are largely identical, and firms can freely enter or exit the market. Revenue of a Competitive Firm The revenue of a competitive firm is calculated as follows: Total Revenue (TR) : This is the total income from selling a product, calculated as Price (P) times Quantity (Q), i.e., TR = P * Q. Average Revenue (AR) : This is the total revenue divided by the quantity of the product sold, i.e., AR = TR / Q. Marginal Revenue (MR) : This is the change in total revenue from selling one more unit of a product. In many cases, margin...