Microeconomics final (chapter 12)

what are the characteristics of a perfect competitive mkt

Perfectly competitive market A market that meets the conditions of (1) many buyers and sellers, (2) all firms selling identical products, and (3) no barriers to new firms entering the market.

Why is the demand curve horizontal

If any one wheat farmer has the best crop the farmer has ever had, or if any one wheat farmer stops growing wheat altogether, the market price of wheat will not be affected because the market supply curve for wheat will not shift by enough to change the equilibrium price by even 1 cent.

What is the relationship between price, average revenue, and marginal revenue for a firm in a perfectly competitive market?

Price is equal to both average revenue and marginal revenue.

What is a price taker

Price taker A buyer or seller that is unable to affect the market price.