Trade

Perfectly Competitive Market

Where there are many firms and each firm is a price-taker. Market demand will be the (horizontal) sum of all the household demand curves, and market supply will be the (vertical) sum of all the firm supply curves. 

Inputs

There are diminishing marginal returns to inputs:
\(\frac{\partial MR_{input}}{\partial Q} = -\)
Demand for inputs within a firm:
\(D_{input} = MR_{input} = P_{input}\)

Profit Maximizing in the Short-Run

\(MR & P = MC\)
\(MR & P > AVC\)

Profit Maximizing Long-Run

\(MR & P > ATC\)