Key implications Firms are price takers'(P=Mr) In the short-run, firms may earn profits or losses Long-run profits are zero Michael R Baye, Managerial Economics and Business Strategy, 3e. CThe McGraw-Hill Companies, Inc, 1999Michael R. Baye, Managerial Economics and Business Strategy, 3e. ©The McGraw-Hill Companies, Inc. , 1999 Key Implications • Firms are “price takers” (P = MR) • In the short-run, firms may earn profits or losses • Long-run profits are zero