Solve:Assume this is a perfectly competitive market.Answer the following questions and explain your answers.Complete the table.QTCFCVCAFCAVCATCMC0$6.501$9.502$10.503$11.504$12.505$13.5067$14.50$18.008$22.009$26.5010$31.50Assume that the market price is $3.50:What is the profit-maximizing level of output for this firm?What is the dollar amount of the profit, or loss?Canter What would happen with the number of firms in this market if the price drops to $3.00? Why?What would be the economic profit, or loss, for this firm if the fixed cost increases by $1.50 andthe market price remains at $3.50?What is the long-run equilibrium price for this company?What is the shut-down price for this company?

2.Profit is maximized when P >= MC and MC is increasing.When P = MC = 3.5, Y = 7 When Y = 7, ATC…

Answered: Solve: Assume this is a perfectly…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 1SCQ: Firms ill a perfectly competitive market are said to be price takers that is, once the market...

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What are the Characteristics of a Purely Competitive Market?
Firms ill a perfectly competitive market are said to be price takers that is, once the market determines an equilibrium price for the product, firms must accept this price. If you sell a product in a perfectly competitive market, but you are not happy with its price, would you raise the price, even by a cent?

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