1 .Perfectly competitive firm faces the law of demand
2. Because only perfectly competitive firms are price takers, only competitive firms can earn profits.
3. To maximize profit, a perfectly competitive firm should produce the level of output at which
marginal cost equals price.
4. A perfectly competitive firm is profitable when price exceeds minimum AVC
5. A competitive firm’s supply curve is just its MC curve.
6. A firm maximizes profit by producing where average total cost is at its minimum.
7. A firm will stay in business in the long run as long as price is greater than or equal to ATC.
8. The existence of losses in an industry means that some firms will leave the industry in the
long- run.
9. Since a firm in perfectly competitive market is a price searcher, it must lower price to sell an additional unit of its product.
10. Perfectly competitive firm engages in a heavy advertising to increase its total revenue and profit
11. Perfectly competitive firm marginal revenue is less then price the firm charges.
12. Perfectly competitive firm engages in non-price competition
