Week 10 · Readings & resources

Week 10 — Readings & Resources

Principles of Microeconomics Free sample edition

Your primary reading is Chapter 10 (in this module). Everything below is the optional, go-deeper layer — pick what helps, skip the rest.

How to use this page

This page has 10 items (4 readings and 6 videos). Allow 57–65 minutes for everything. Each group points back to the matching chapter section and class-session segment, so use the full menu when you want more, or take the quick path below.

Every video here has captions: turn them on with the CC button in the player. The chapter covers the same ideas in text.

Pick-one quick path (19–21 min total)

① What makes a market perfectly competitive

Chapter 10, Section “Name the traits: what makes a market perfectly competitive” · Session 1, Segment 1, “The traits of perfect competition” · Remember: when many sellers offer the same product, no one seller can move the price, so each one takes it as given.

Introduction to Perfect Competition: Economics Explained — Federal Reserve Bank of St. Louis — a six-minute tour of the wheat market: many buyers and sellers, a nearly identical product, and easy entry and exit, so a single grower faces a flat demand line at the market price and sells nothing if it asks a penny more. Its closing minute notes that most real goods are not like wheat, which is why the chapter calls the model a benchmark. (video, 6 min) (captions: creator)
What Is Perfect Competition? ELI5 with examples — Think Econ — a two-minute picture of a farmers' market where every stall sells identical apples, followed by three traits and three markets that come close, such as staple crops and fresh fish. Its list of traits matches the chapter's, except that it leaves out buyers and sellers knowing the going price. (video, 2 min) (captions: automatic)
Competition Counts — Federal Trade Commission — the agency's short plain-language page on why rivalry matters to shoppers, built around a town with only one grocery store. Read it as the real-world reason economists care about the competitive benchmark: with many rivals, no seller can hold its price up. The page describes the agency's view of competition in general, not the perfect-competition model itself. (reading, 2–4 min)

② Price, marginal revenue, profit, and loss

Chapter 10, Section “Apply the output rule: MR = MC, which reads P = MC” · Session 1, Segment 3, “The output rule” · Remember: a price taker's marginal revenue is the market price, so it makes every unit whose marginal cost is no more than that price.

Perfect Competition: Part I — Economics in Many Lessons — a carrot farmer takes a market price of two dollars a pound, so every extra pound adds two dollars of revenue and marginal revenue equals price. The video then finds the farmer's output where marginal revenue equals marginal cost and computes profit both as revenue minus cost and as price minus average cost, times quantity, the same rectangle the chapter draws. This builds on Week 9's work with production and costs. (video, 9 min) (captions: automatic)
How price mechanism helps us make decisions: producers and consumers react to incentives — Economics Mafia — an animated story about a burger stand: beef burgers that sell below their cost bring losses and the owner stops making them, while chicken burgers that sell above their cost bring profits and more get made. Watch it for the idea that profits and losses are signals that pull sellers in and push them out. When the narrator says a competitive seller should produce where price equals cost, read that as price equals marginal cost, the chapter's P = MC rule; a price equal to average total cost would leave no profit at all. Skip its opening and its middle aside about which careers pay well and why fewer people train as lawyers; those are real-world claims about jobs and pay that this course does not check. (video, 6 min) (captions: automatic)

③ Entry, exit, and zero economic profit

Chapter 10, Section “Follow the long run: entry and exit” · Session 2, Segment 8, “Entry and exit” · Remember: profits draw new firms in and losses push firms out, and both stop when the price reaches the lowest average total cost.

Adam Smith's Invisible Hand Theory Explained: Economics — Federal Reserve Bank of St. Louis — a seven-minute explainer on the two forces Adam Smith described in 1776, self-interest and competition, told through bakers in one town: a baker who charges too much loses buyers to rivals, and a baker who is the only one in town draws a new rival hoping to share the profit. That second story is long-run entry in words. Its last minute presents the debate over how much government regulation markets need as a disagreement among economists, which is a normative question this course labels as one. (video, 7 min) (captions: creator)
Perfect Competition: Long-run Equilibrium — Economics in Many Lessons — watch only the first minute and a half, which explains that long-run equilibrium in perfect competition means zero economic profit, a normal rate of return, where the price equals marginal cost and the lowest average cost. Stop when the problem setup begins; the rest finds the lowest average cost with calculus, which this course does not use. (video, 8 min) (captions: automatic)
Wheat Sector at a Glance — USDA Economic Research Service — the agency's overview of a standardized crop sold in a few market classes, a market close to the competitive model. Read the opening section, which gives reasons U.S. wheat plantings have fallen, including returns that slipped below those of other crops; that is long-run exit, land leaving one use for a better-paying one. Skip the trade sections. (reading, 5–7 min)
Business Dynamics Statistics: About — U.S. Census Bureau — the agency's description of a data series that counts business startups and shutdowns, and the jobs they create and destroy, by industry and region. Read the introduction and the uses section, and keep it in mind while completing the Week-10 module overview: entry and exit in this week's model are what these counts measure in real markets. Skip the technical definitions. (reading, 4–6 min)

Optional one-stop reference (free online reference)

Competition — Concise Encyclopedia of Economics, Econlib — a signed reference entry on how competition works in real markets. Read the second paragraph, on how profits draw imitators and losses push firms to change course, and the closing paragraph on the textbook model of perfect competition, which the author calls unrealistic because it assumes perfect knowledge; the chapter makes a similar point when it calls the model a benchmark. The middle paragraphs argue a view about government protection of firms; that is a normative position, so read it as one side of a debate rather than a model result. (reading, 8–10 min)

Heads-up (links rot): these point to outside sites that occasionally move or rename pages. If a link ever fails, tell your instructor and use the reference above in the meantime.

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