Name: Morad Hijazin
Course Number: ECON 5F70 040,
Semester: Summer 2016
Assignment Name: Unit 3 Application
Application 2: Explain how purely competitive firms can use the total-revenue-total-cost approach to maximize profits or minimize losses in the short run. Provide an industry example to illustrate your explanation
In the pure competition there is no way for a firm or producer to influence the market price and that because each firm producing same products and has a portion of the total market. In other words an individual producer can sell as much as he is able to produce at the going market price, but if he tries to raise his price, even a little, the demand for his products might go to zero.
For example, the wheat. Consumers see
