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)
“The perfectly competitive firm’s entire marginal cost curve is its short-run supply
curve.” Is the statement true or false? Explain your answer.
“Firm A, one firm in a competitive industry, faces higher costs of production. As a
result, consumers end up paying higher prices.” Discuss.
For a perfectly competitive firm, profit maximization does not conflict with resource
allocative efficiency. Do you agree? Explain your answer.
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?