89%(72)64 out of 72 people found this document helpful
This preview shows page 2 - 5 out of 5 pages.
3.Using the table given here, what quantity of output should the firm produce? Explain your answer.4.Is the firm in Question 3 a perfectly competitive firm? Explain your answer.6.Draw the following: (a) a perfectly competitive firm that earns profits (b) a perfectly competitive firm that incurs losses, but will continue to operate(c) a perfectly competitive firm that incurs losses and will shut down in the short-run.
8.In the following figure, what area(s) represent(s) the following at Q1? (a) Total cost; (b) Total variable cost; (c) Total revenue; (d) Loss (negative profit).9.Why does the MC curve cut the ATC curve at the latter’s lowest point?10.Suppose all firms in a perfectly competitive market are in long-run equilibrium. Illustrate what a perfectly competitive firm will do if market demand rises.This is illustrated by Exhibit 10 in the text.II. Chapter 10 Questions & Problems: 1, 5, 6, 7, 9 (p301)1.The perfectly competitive firm exhibits resource allocative efficiency (P = MC), but the single-price monopolist does not. What is the reason for this difference?