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Micro 3.7-Firm's in Competitive Market

Last updated over 1 year ago

8 questions

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Question 1

1.

What are the main characteristics of a competitive market?

Question 2

2.

What do firms in a PC maximize?

Question 3

3.

Draw MC, AVC and ATC making a + profit for a perfectly competitive firm. Show on your graph where the firm is making a + profit.

Question 4

4.

Under what conditions will the firm shut down?

Question 5

5.

Under what conditions will the firm exit the market?

Question 6

6.

Does a competitive firm's price equal its marginal cost in the short run, in the long run, or both? Explain.

Question 7

7.

Does the frim's price equal the minimum of its average total cost in the short run, in the long run, or both? Explain.

Question 8

8.

Are market supply curves more or less elastic in the long run?

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