1a. Make 2 graphs of a firm and a market, depicting perfect competition. Draw them side...

1a. Make 2 graphs of a firm and a market, depicting perfect competition. Draw them side by side.

1b. Complete the cost structure info for the typical firm, (average total cost, marginal cost, etc) and on the market graph draw a market equilibrium that results in a market price (pm) which causes the typical firm to make profit.

1c. Add in and label the demand curve (df) for the typical firm (given (a)).

1d. Identify the quantity the typical firm will produce with a qf (given (b)).

1e. Given all that is above, show the size of the profit made by the typical firm when it produces quantity (qf) at price (pf). Shade in the profit rectangle.

1f. Show what the market picture looks like after all the long run adjustments are complete, given our nice assumptions.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

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