1'00 .III SG C} B online.ewc.edu (L Q) PURE/PERFECTION COMPETITION ASSIGNMENT (50 pts) From your readings and the PP presented in class, please answer the following. I do not want responses taken from the internet. If so, you will not receive credit-READ,READ,READ 1. What assumptions (conditions) that underlie the Perfectly Competitive Model? How would you describe the shape of the Demand curve forfirms operating in Competitive markets? State the 2 condition for Profit Maximization ie. when will the firm Maximize profits? If a firm incur losses in the short run, will they continue to produce? Why or why not? When will the firm 'shut down'? Explain In the Short run a firm operating in a Competitive Market Structure produces 100 Gameboys, the firm's total cost of producing Gameboys is $10,000. If the firm produces one more Gameboy, its total cost increases to $10,250. What is the marginal cost of producing 101 Gameboys instead of 100? Suppose the selling price of Gameboys is P=$300. Should the firm produce the 1 extra Gameboy? Why? Whynot? Suppose the selling price of Gameboys is P=$200. Should the firm produce the 1 extra Gameboy? Why? Whynot? If firms are making excess profits in the Long-Run, describe what will happen? If firms are incurring economic losses, describe what will happen? What must be true in Long-Run Equilibrium for all firms operating in competitive markets? 10. Can economic profits be made in the long-Run? Explain