1- Market and Firm Outcomes in Perfect Competition

Using a graph, determine market and firm short-run and long-run outcomes in perfect competition.

Price ATC (in dollars) MC AVC $10 $8 MR $5 - - -. - - - X O 9250 9400 Quantity of OutputPrice S = MC ATC AVC MR = MC ATC AVC Firm Demand - - MR X O Quantity of Output FirmPrice Supply Long-Run 2 Industry Supply Curve 1 3 - Demand X O Q Q2 Q 3 Quantity Market\fPrice Supply 2 1 P. 3 P. Long-Run Industry - - - Supply Curve - Demand - X O Q Q 2 Q 3 Quantity Market