Cheat sheet · Class 11 · CBSE · Commerce Economics
Microeconomics: The Theory of the Firm under Perfect Competition cheat sheet
The whole chapter on one page: key formulas, facts and the points to remember, for quick revision before a test.
CBSE Class 11 · Economics
Cheat sheet
Chapter 11The Theory of the Firm under Perfect Competition
Price taker: P = AR = MR; profit max where MC = MR and MC rising.
1. Perfect Competition
- many buyers & sellers
- homogeneous product
- free entry & exit
- perfect knowledge
- price taker
2. Revenue
3. Equilibrium
- Conditions: MR = MC and MC cutting MR from below.
- Short run: shutdown if price < min AVC.
- Long run: normal profit only, P = min AC.
- Supply curve: rising part of MC above min AVC (short run).
4. Supply
- Law of supply: price ↑ ⇒ quantity supplied ↑.
- Shifts: technology, input prices, taxes, number of firms.
5. Key Points
- Break-even point: P = min AC.
- Shutdown point: P = min AVC.
- Market supply = sum of firms' supply.
- Unit tax shifts supply left.
Remember: P = AR = MR | MR = MC | shutdown & break-even
Microeconomics: The Theory of the Firm under Perfect Competition: questions and notes
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