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Harry Bindloss

Objectives of firms

All firms want to profit maximise


Economists have 2 different profits

1. Normal profit: The entrepreneur receives the minimum amount of profit to keep
him/her in business. If there is less he/she will change industries or place resources into…

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Harry Bindloss

Price Taker

Total Revenue = Quantity sold x price

Average Revenue = Total revenue/Quantity

Marginal Revenue = Revenue generated by each extra unit

Revenue for the Price taker

All firms in that particular market cannot set a price and they are all at the same level so

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Harry Bindloss

Revenue for Price Makers

Price Maker ­ Firms can influence the market. Could be due to a sole supplier or a unique
product. Therefore this firm has an influence over the price. It will have a downwards sloping
demand curve.

The MR curve and AR curve will be…


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