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1) What are the requirements for perfect competition? 2) Define the shutdown point. Explain why the firm shuts down in the short run if the

1) What are the requirements for perfect competition?

2) Define the shutdown point. Explain why the firm shuts down in the short run if the price falls below this point.

3) In the long run, perfectly competitive firms cannot make an economic profit. Why?

4) Describe how economic losses are eliminated in a perfectly competitive industry.

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