1. Assume that peaches are grown in a perfectly competitive market and that peach farms

have cost curves that look like those in this chapter. Draw a graph for a peach farm that

earns a profit. Label the axes, as well as the curves for demand, marginal revenue, average

total cost, and marginal cost. Label the prices of peaches "P" and the quantity of peaches

the farm will produce "Q". Shade and label the farm's profit.

2. Suppose the firmsin a perfectly competitive market earn profits in the short run. Explain

how this market will reach a long-run equilibrium. Illustrate your answer with side-by-side

graphs of the market and a representative firm.

3.True, false or uncertain: After some firms leave a market in which they were experiencing loses, the remaining firms will produce the same quantity of output as before the other firms left. Explain your answer using side-by-side graphs of the market and a representative firm.

4. True, False or uncertain: A firm maximizes its profit by producing the quantity at which the marginal cost is as far below the price as possible. Explain your answer.

5. What characteristic does hamburger market in your area share with a perfectly competitive industry? What conditions for the perfect competition does it violate?

Anderson, D., Survey of Economics. (2020). Worth Publisher Macmillan learning