APEcon Homework: 10/28/15
Read Chapter 10 (pages 220 – 230): stop at "Marginal Cost and Short-Run Supply.
a. List and explain the characteristics of pure competition.
b. List 4 examples of perfectly competitive industries or markets.
c. Why is the demand curve of a perfectly competitive firm perfectly elastic?
d. Why is a perfectly competitive firm called a "price taker?"
e. What is the relationship between price and average revenue for a perfectly competitive firm?
f. At what level of output should a perfectly competitive firm produce? State your answer
using both methods for calculating profit-maximization.
g. Take the quick quiz on p. 228 and check your answers.
h. Why should a firm sometimes continue to produce even if it is incurring losses?
i. At what point should a firm shut down?
APEcon Homework: 10/28/15
Read Chapter 10 (pages 220 – 230): stop at "Marginal Cost and Short-Run Supply.
a. List and explain the characteristics of pure competition.
b. List 4 examples of perfectly competitive industries or markets.
c. Why is the demand curve of a perfectly competitive firm perfectly elastic?
d. Why is a perfectly competitive firm called a "price taker?"
e. What is the relationship between price and average revenue for a perfectly competitive firm?
f. At what level of output should a perfectly competitive firm produce? State your answer
using both methods for calculating profit-maximization.
g. Take the quick quiz on p. 228 and check your answers.
h. Why should a firm sometimes continue to produce even if it is incurring losses?
i. At what point should a firm shut down?
APEcon Homework: 10/28/15
Read Chapter 10 (pages 220 – 230): stop at "Marginal Cost and Short-Run Supply.
a. List and explain the characteristics of pure competition.
b. List 4 examples of perfectly competitive industries or markets.
c. Why is the demand curve of a perfectly competitive firm perfectly elastic?
d. Why is a perfectly competitive firm called a "price taker?"
e. What is the relationship between price and average revenue for a perfectly competitive firm?
f. At what level of output should a perfectly competitive firm produce? State your answer
using both methods for calculating profit-maximization.
g. Take the quick quiz on p. 228 and check your answers.
h. Why should a firm sometimes continue to produce even if it is incurring losses?
i. At what point should a firm shut down?