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Total Profit
total revenue-total cost
Per Unit Profit
P-ATC
Goal of Firm
Maximize Profit
Perfect competition
Many, firms, many buyers, homogenous product, free entry and exit form industry, perfect knowledge
Perfectly competitive
Firms are price takers
Firm is more than happy
TP>0
Firm just covers opportunity cost
TP=0
Firm makes a loss but stays in business
TP<TFC
Firm makes a loss and shuts down
TP>TFC
Positive profits
More firms, supply increases, Pe decreases
Negative profits
Less firms, supply decreases, Pe increases
Good things about perfect competition for consumers
price is lowest possible price to get firms to produce output in long run, allocates efficiency
Note 
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