Perfect Competition: How to Graph it

A brief video taking students through the proper mechanics of diagramming a perfectly competitive firm operating in a perfectly competitive market. In this video, I demonstrate how economic profits are eliminated in the long run.

[@dollypushpa5503]

Thank you so much for this video...got cleared with the concepts...loved ur videos on how to graph...great and clear explanation.

[@eileensie]

This is great. Helped a lot for my GSCE's.

[@frayhound]

Thank youuuuu for this

[@briggskidd]

I love you

[@glitterandmoredoom]

Thank you so much

[@stellayaaa___]

I still don't understand why D=AR=MR :(

[@KylePurpura]

+Stella Ludwig Hi Stella. Your confusion is common. Here is a good way to think about it. Imagine that I have 50 students standing outside of a classroom, and I invite them in one at a time. As I invite them in, I have one of my teaching assistants measure each student's height. Okay? If all the students are exactly the same height (say 5'9"), then what is their average height? 5'9" right? As I invite students into the room, what is the marginal height my assistant records? It would be 5'9" right because every student is exactly the same height. Now imagine that D is equivalent to all the students standing outside of my room. AR is equivalent to the average height of all the students once I total their height and then divide by 50. MR would be the height measured each time a new student walks through the door. If every product is identical and sells for exactly the same price as the previous item, then D must = AR which must equal MR and they all must = the price of the product.
Does this analogy help?

[@stellayaaa___]

Thank you. I understand now :)

[@SPECIAL_EDUCATOR1311]

+Kyle Purpura sir AR. is avrg height so it 5'9 bt if the height of all 50 students is equal than MR which is the difference of the additional value it's also 5'9?

[@salemgheit2293]

Therefore (based on my comprehension of the analogy)
1- price = the 5'9". (firms in Perfect competition are price takers).
2- D= the height of each student (Demand curve = infinitely elastic).
3- number of students = (number of firms in marketplace).
4- AR= the average height of all students heights aggregated and divided by the number of students. (average revenue).
5- MR= the change in total height after each student is let in (marginal revenue).

[@astonmargolis-dias7089]

what bout avc

[@KylePurpura]

If demand falls underneath the AVC, then the firm will shut down. The AVC is critical in understanding the firm's shut down point.

[@710418oo]

you dont do these in gcse's lol