Illustrate with a diagram and explain the
short-run perfectively competitive equilibrium for both...

Question

Illustrate with a diagram and explain the
short-run perfectively competitive equilibrium for both (i) the individual firm
and (ii) the industry;

David · Accepted Answer

Illustrate with a diagram and explain the short-run perfectively competitive equilibrium for both (i) 
the individual firm and (ii) the industry;
In perfectly competitive markets, many small firms operate in the market.  They sell exactly the 
same product (that is homogeneous products) in the market. But in terms of size compare to the 
industry they are too small to have any control over price. These competitive firms can only 
operate as price takers in the market. They are price -takers in the sense,

Illustrate with a diagram and explain the short-run perfectively competitive equilibrium for both (i) the individual firm and (ii) the industry;

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