Unit 3: Production, Cost, and the Perfect Competition Model

AP Microeconomics

What You Will Learn

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Key Relationships to Master

The Cost Curve Family

1234567891012345678910111213141516QuantityCost ($)ATC minAVC minMCATCAVC

MC crosses ATC and AVC at their minimum points — this is always true

Unit Exam Weight

Unit 3 topics

Unit 3 overview3.1The Production Function3.2Short-Run Production Costs3.3Long-Run Production Costs3.4Types of Profit3.5Profit Maximization3.6Firms' Short-Run Decisions to Produce and Long-Run Decisions to Enter or Exit3.7Perfect Competition3.8Long-Run Equilibrium and Efficiency in Perfect Competition
← Previous2.9 Market Equilibrium and EfficiencyNext →3.1 The Production Function
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