“The perfectly competitive firm’s entire marginal cost...

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Principles of Microeconomics (Econ 2600) Lakeland Community College Dr. Hyojin Jeong Homework Assignment 4 Suggested Answers I. Chapter 9 Questions & Problems: 1, 3, 6, 8,12, 15, 17 (p275-276) 1. “The perfectly competitive firm’s entire marginal cost curve is its short-run supply curve.” Is the statement true or false? Explain your answer.
3. “Firm A, one firm in a competitive industry, faces higher costs of production. As a result, consumers end up paying higher prices.” Discuss.
6. For a perfectly competitive firm, profit maximization does not conflict with resource allocative efficiency. Do you agree? Explain your answer.
8. You read in a business magazine that computer firms are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time to the following: computer prices, the profits of computer firms, the number of computers on the market, and the number of computer firms?

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