Module 4 _ Solved.docx - Question 1 (10 points) If the...

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Question 1(10 points)If the firm’s lowest average cost is $52 and the corresponding average variable cost is $26,what does it pay a perfectly competitive firm to do if1.The market price is $51?
2.The price is $36?
3.The price is $12?4.If the price is $ 12 and the M.C equals the price
Provide an answer for each item in the response box below.(Chapter 10: Question 4 from Test Yourself, p. 212)Question 2(10 points)Regarding the four attributes of perfect competition (many small firms, freedom of entry,standardized product, and perfect information):1.Which is primarily responsible for the fact that the demand curve of a perfectlycompetitive firm is horizontal?
2.Which is primarily responsible for the firm’s zero economic profits in long-runequilibrium?

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Term
Summer
Professor
Jacob Kindrop
Tags
Economics, Perfect Competition, restraint of trade, Test Yourself

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