Back to Production, Cost, and the Perfect Competition Model

Lesson PreviewLesson 7 of 7 in this unit

3.7 Perfect Competition

Part of Production, Cost, and the Perfect Competition Model in AP® Microeconomics. Read the opening section, then create a free account for the full interactive lesson, practice, and progress tracking.

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Key Concepts of Perfect Competition

While we talked about this a little in the previous lesson, here we will describe perfect competition in more detail.

  • Perfect Competition: A market structure characterized by many buyers and sellers, identical products, and no barriers to entry or exit.
  • Price Taker: Firms cannot influence the market price and must accept the prevailing price determined by supply and demand.

In this unit

7 lessons

  1. 3.1The Production FunctionPreview lesson
  2. 3.2Short-Run Production CostsPreview lesson
  3. 3.3Long-Run Production CostsPreview lesson
  4. 3.4Types of ProfitPreview lesson
  5. 3.5Profit MaximizationPreview lesson
  6. 3.6Firms’ Short-Run Decisions to Produce and Long-Run Decisions to Enter or Exit a MarketPreview lesson
  7. 3.7Perfect CompetitionThis lesson

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