Perfect Competition (Economics)

Recall cards on the perfectly competitive market: many firms selling identical products, full information, and free entry and exit, with each firm a price taker facing a perfectly elastic demand curve. How a competitive firm chooses output where marginal revenue equals marginal cost (and price equals marginal cost), when it earns a profit, breaks even, or takes a loss against average total cost, and the shutdown point at minimum average variable cost that makes its marginal cost curve its short-run supply curve. Then the long run: how entry and exit drive economic profits to zero at minimum average total cost, the constant, increasing, and decreasing cost industries behind the long-run supply curve, and why the outcome is both productively and allocatively efficient.