00:01
So here we're talking about perfect competition, and we are given a couple of pieces of information, right? so p is equal to 20.
00:08
The first thing we know in perfect competition is that everyone must sell at the same price.
00:17
And the reason for that is because of the nature of perfect competition, right? imagine that you have 600 places to buy something, and 599 of them charge 20, and then the 600 charges to charge 25.
00:33
Well, if you're buying the identical product, why would you pay 25 when 599 other people are trying to sell it to you for 20? right? right? so the idea of perfect competition means that everyone gets forced down to a minimum price.
00:50
We then have a cost curve, right? the cost curve is 5 plus q squared.
00:56
And this means that the marginal cost, which is the derivative of cost with respect to q is to q.
01:04
So in competition, you want to set prices equal to marginal cost.
01:09
The idea says, look, when i sell a unit, i'm going to get 20, right? so i should keep producing units as long as i can produce them for less than 20.
01:18
I'm going to sell it for 20...