Review_Questions_for_Perfect_Competition_Sol

# Review_Questions_for_Perfect_Competition_Sol - 300 700 200...

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f3cb95cf1d1175e4cf35b5343a558041912667b0.doc 1 1. An example of a perfectly competitive market could be any of the following: The market for maple syrup, the stock market, the market for wheat, rice or corn and the  market for copy shops. 2. c) (i), (iii) and (iv) 3.  A (n) _____ refers to a short-run decision by a firm while a (n) _______ refers to a long-run  decision. 7. Shut down, exit Use Table 1 to answer Question 4.  Question 4 is a table of a perfectly competitive firm: Table 1 Quantity  (bushels of corn  per week) Total revenue Marginal  Revenue Total cost Marginal Cost TR - TC 0 0 300 500 10 300

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Unformatted text preview: 300 700 200-400 20 600 300 800 100-200 30 900 300 900 100 40 1200 300 1100 200 100 50 1500 300 1400 300 100 60 1800 300 2000 600-200 70 2100 300 2800 800-700 80 2400 300 4000 1200-1600 4. a) The firm’s profit is greatest when it produces 40 or 50 units of output. b) The firm’s maximum profit is either at 40 or 50 units of output and is \$100. c) Marginal revenue and marginal cost at the firm’s profit-maximizing quantity is 300. 5. a) This firm is making a profit. b) Profit = (P – ATC) x Q = (7 – 5) x 15 = \$30 f3cb95cf1d1175e4cf35b5343a558041912667b0.doc 2...
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Review_Questions_for_Perfect_Competition_Sol - 300 700 200...

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