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Which of the following conditions descriptive a perfectly competitive market Many barriers to entry Firms are price takers The number of firms is large

Which of the following conditions descriptive a perfectly
competitive market?

– Many barriers to entry

– Firms are price takers

-The number of firms is large

– Firms’ products are differentiated

– There is complete information

– Firms are profit maximizers

 

2- Graph marginal costs from the table below and answer the
following questions:

 

OUTPUT MARGINAL COSTS

1 15

2 12

3 20

4 27

5 34

6 40

7 47

a) The firm can sell a helmet for $34 and the firm is
producing 6 helmets Is it maximizing profit ? Why or why not?

 

b) The firm can sell a helmet for $34 and the firm is
producing 4 helmets Is it maximizing profit ? Why or why not?

 

c) The firm can sell a helmet for $34 What is the profit-
maximizing level of output?

 

3- Why doesn’t a perfectly competitive firm yield economic
profit in the long-run?

Mar 17 2020 View more View Less

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