Week 2_6 Economic Profit in Perfect Competition

Step 1:

Get to know Basic Concepts:

-- As long as firms establish their normal profit, they will stay in the market.

-- Economic profit attracts new suppliers to the market.

-- In the long run firms will only make a normal profit.

-- If firms are unable to make a normal profit (e.g. the cost are too high), they will leave the market.

Step 2:

Question:

What happens to the price of the good?

Discuss with fellow students in Discussion Forum.

Step 3:

Watch the Video: