Chapter 10 discussion questions.docx - Chapter 10...

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Chapter 10Discussion Questions1.Explain why a perfectly competitive firm does not expand its sales without limit if itshorizontal demand curve indicates that it can sell as much as it desires at the currentmarket price.
3.Regarding the four attributes of perfect competition (many small firms, freedom ofentry, standardized product, and perfect information):a.Which is primarily responsible for the fact that the demand curve of a perfectlycompetitive firm is horizontal?b.Which is primarily responsible for the firm’s zero economic profits in long-runequilibrium?

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Term
Fall
Professor
Smith

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