kay ecn212 - 1. A pure competition market is a market in...

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1. A pure competition market is a market in which there are many buyers and sellers of a homogeneous product. The profit maximizing level of output is when marginal revenue equals marginal cost. In this scenario it is closest to the marginal revenue is when the quantity produced is 5. The production level is found by subtracting the cost right below it to the top one so, for the first one its 21 minus 15. After all the answers are found then it is the one that is closest to the actual price (marginal revenue). If the marginal revenue is larger than the marginal cost then the firm will lose profit. So, when it equals each other then the firm is making the most amount of money. 2. Yes, no matter what firm you are in the longer you are in it, the more of the same firms will continue to grow. For example if Miguel is in this industry for the long run then he should expect more number of firms. The output may stay the same since all companies will have an increase in taxes not just his company. Even though the price is increased, if there is a demand for oats
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This note was uploaded on 06/16/2011 for the course ECN 212 taught by Professor Martin during the Spring '11 term at Paradise Valley Community College .

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