equilibrium price either. Why should they when they can sell all they want at the higher price? Other examples

Access for free at openstax.org
8.2 • How Perfectly Competitive Firms Make Output Decisions 189

of agricultural markets that operate in close to perfectly competitive markets are small roadside produce

markets and small organic farmers.

LINK IT UP

Visit this website (http://openstax.org/l/commodities) that reveals the current value of various commodities.

This chapter examines how profit-seeking firms decide how much to produce in perfectly competitive

markets. Such firms will analyze their costs as we discussed in the chapter on Production, Costs and Industry

Structure. In the short run, the perfectly competitive firm will seek the quantity of output where profits are

highest or, if profits are not possible, where losses are lowest.

In the long run, positive economic profits will attract competition as other firms enter the market. Economic
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