1. A firm€™s short-run supply curve shows the relationship between ________ on the horizontal axis and________ on the vertical axis.
2. To draw a firm€™s short-run supply curve, you need its ________ curve and its ________ price.
3. A perfectly competitive industry has 100 identical firms. At a price of $8, the typical firm supplies seven units of output, so the market quantity supplied is ________ units of output.
4. Figure shows a long-run equilibrium because (1) the quantity ________ equals the quantity ________; (2) the typical firm maximizes ________ by picking the quantity at which ________ equals ________; (3) each firm makes________ economic profit because ________ equals ________.

5. A firm making zero economic profit stays in the market because total revenue is high enough to cover all the firms€™ costs, including the opportunity costs of the entrepreneur€™s ________ and ________.
6. In Pakistan, the market for phone service is perfectly________, because a person can enter the market with a relatively small initial investment only $310.
7. Soybeans versus Processor Chips. Why is the market for soybeans perfectly competitive, with thousands of soybean farmers, while the market for computer processor chips is dominated by a few large firms?

Transcribed Image Text:

MC Sh ort-run market supply ATC 2 $7 $7 Marginal revenue Price Market demand 600 Shins per minute B) Individual Firm Shirts per minute (A) Market