Perfect Competition Questions
Answer ALL of the questions and submit your completed work on ManageBac.
- What is so distinct of a purely competitive demand curve? Why is it so?
- Can someone explain the reason for: MR=D=AR=P?
- What are the two ways of determining the level of output at which a competitive firm will realize maximum profit or minimum loss?
- What type of market structures can you apply the two ways of determining maximum profit or minimum loss to?
- Why must a firm in a purely competitive market determine whether or not it is advantageous or in their best interest to produce the product at the current market price?
- How will a firm in a purely competitive market determine whether or not it is advantageous or in their best interest to produce the product at the current market price?
- Is it in the firms best interest to produce as many products as possible? Does more production yield greater profit? Why?
- What is it called when TR equals TC?
- What does it mean for a firm if while in the production of their product, marginal cost (MC) exceeds its marginal revenue?
- If marginal revenue does not equal or exceed average variable cost….
- Explain the MC=MR rule.