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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___

    ...

    Solution Summary

    Assistance with understanding how perfectly competitive markets work.

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