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Completing statements on perfect competition

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1. Complete the following statements for a firm in a perfectly competitive industry (8 points each):

a. The firm makes economic profit if the market price for the product is above ___________________

b. The firm's marginal revenue (MR) is the same as the _______________________

c. The firm's breakeven point is at the minimum _______________________

d. In the shortrun the firm will continue in business provided that the price is above _________________________

e. The firm's shutdown point is at the _______________________________

f. The firm's supply curve is that portion the marginal cost (MC) curve above minimum ______________________

g. The firm maximizes profit by setting MR equal to _______________________________________

h. The firm's profit is its total revenue minus ______________________________________________

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Solution Preview

1. Complete the following statements for a firm in a perfectly competitive industry (8 points each):

a. The firm makes economic profit if the market price for the product is above ___average marginal cost__

b. The firm's marginal revenue (MR) is the same as the ____demand curve________

c. The firm's breakeven point is at the minimum _average total cost___

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Solution Summary

Assistance with understanding how perfectly competitive markets work.

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