The demand curve \"as seen by the firm\" varies with the structure of the releva

Question

The demand curve "as seen by the firm" varies with the structure of the relevant market.  What is the structure for a firm that has to act as a price taker?  Is such a firm doomed to suffer losses?  How does the profit/loss situation change between the short run and the long run for such a firm?  In the long run are average costs of production efficient?

What is the structure for a firm with at least some ability to determine price?  How are price and output levels determined rationally?  Since price can, at least to some degree, be determined by the seller, is this firm sure to enjoy profits?  How might the long run differ from the short run?

Explanation / Answer

Hoerizontal demand curve (infinitely elastic)

No if average total cost is below price.

In the sort run it may suffer profits or losses, in the long run it will earn 0 economic profits as resources flow in if economic profits are being made or out if economic losses occur. I the long run the firm will produce at the bottom of its average total cost curve so it will be producing efficiently.

If the firm can influence price it has a downward sloping demand curve. It will produce output where marginal cost equals marginal revenue. The firm may or may not enjoy profits depending on its average total cost curve. In the long run, if barru=iers to entry or exit are not too high resources will flow in (if economic profits are being made) or out if losses occur so economic profit will be driven to zero.

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