There are many ways of promotion that a company can do. They can put some advertisements on mass media such as news papers and television. And the company can also do more direct promotion such as joining the trade shows or bazaar. The later way has a limited scope but it has greater impact since the company has the chance to directly interact with the customers. To attract customers, it is essential to decorate the booth to be as interesting as possible. Adding some table skirts that shows your company logo and some banner stands that briefly describe the products will definitely help the customers to understand more regarding the products.

If you have more space for your booth, try to put pipe and drape works as the background of your booth. Choose the color and the logo that represent your company so those potential customers will see your company as professional company. Actually there are still a lot more ways that you can do to make your trade show booths become more interesting and stand out from the crowds.

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To earn as large a profit as possible, a firm in a competitive market will chose the output that makes marginal cost equal to the market price. If the firm were to produce q _SD, marginal cost would be less than price. By increasing its output, the firm would increase its profit because the marginal cost of the additional output would fall short of the marginal revenue that the sale of the additional output would bring in. But by increasing its output, the firm world increase marginal cost, moving marginal cost closer to price. As long as marginal cost is less than the market price, the firm will gain by increasing its output. When the firm reaches the output the market its marginal cost equal to the market price, it will not profit by further increases in output.

A similar argument-which you should work through for yourself to make sure that you understand the logic involved-shows that if the price was P₁ and the firm was producing more than q₁ is the firm’s would maximize its profit by reducing its output until marginal cost was equal to price.

Sometimes, however, the firm will maximize its profit (actually, minimize its losses) in the short run by shutting down. If the firm shut down, its losses equal the rental cost of the fixed factors of production, a cost that must be covered no matter how much output is produced.

If the price falls below its average variable cost, the firm would lose even more than its fixed cost if it put output in the market. Not only would the firm lose its fixed cost, but it would have an additional loss on every unit sold: the shortfall of the price from the firm’s average available cost. To avoid such a loss, the profit-maximizing firm will shut down if the market price falls below the minimum average variable cost.

Combining the arguments of the preceding two paragraphs, we see that the supply curve of a single firm in a competitive industry is its marginal cost curve above the shutdown point.

The market demand curve shows the quantity that consumers will purchase at different prices. Short-run market equilibrium occurs at the intersection of the market demand and supply curves.the initial short-run equilibrium price is P₁ and the short-run equilibrium industry output is Q_1. , the typical firm will produce an output q₁ in short-run equilibrium.

Long-Run Competitive Equilibrium

In the long run, new firms will be able to come into the market. Firms already in the market will be able to set up new plant if they find it profitable to do so. The equilibrium at E₁ offers an opportunity to earn on economic profit, and this will attract new capital to the market. As additional plants are built, the output they produce at different prices is added to the short-run market supply curve. The short-run supply curve shifts to the right, and market equilibrium slides down the demand curve. The short-run equilibrium price falls, and the quantity supplied increases.

This process of entry, increased supply, and reduction in price will continue so long as there is a profit to be made by entering-so long as the price exceeds the firm’s average cost. Eventually the price will fall until it equals the minimum average cost. The long-run equilibrium for the single-plant firm is q _LR. Industry output in long-run equilibrium is Q_LR.

In long-run equilibrium, each firm’s marginal cost equals the market price so each firm is maximizing its profit. The market price also equals average cost, so firm are earning only their opportunity cost. Because individual firm profit is maximized, no firm has any incentive to change is behavior. Because economic profit is zero, there is no incentive for new firms to come into the industry (and no incentive for firms in the industry to exit). This is equilibrium because it will persist unless some external force shifts firm cost curves or the market demand curve.