3126 PM Fri Oct 8 Insert Draw Layout Review View Perfect competition 2 Worksheet Use the following graph for questions 1-4 AT M l l : DzM ' I ' I ' I ' I ' I ' I ' I ' I q 50 A 1) Is this firm going to make profits or losses? 2) Is this a graph of the short run or the long run? 3) In the above situation, eventually rms will the industry which will the market supply and price will 4) If the price rose to $11, the firm would produce units, total revenue would be , total costs would be , and prots would be 3126 PM Fri Oct 8 Insert Draw Layout Review View Use the following graph for questions 5-8 AT D: M 5) Is this firm going to make profits or losses? 6) Is this a graph of the short run or the long run? 7) In the above situation, eventually rms will the industry which will the market supply and price will 8) If the price fell to $8, the firm would produce units, total revenue would be , total costs would be , and prots would be 9) Bureaucracy issues, labor market problems, and infrastructure problems can all cause ATC to as plant size . This is called of scale. 3126 PM Fri Oct 8 Insert Draw Layout Review View 10) In the long run, rms in Perfect Competition are forced to produce with a plant size that is at the of the long run ATC. So, one result of Perfect Competition is that they have the ATC possible. 11) In Perfect Competition, if price rises, the firms will respond by producing . This sound like a part of the law of 12) For a firm in Perfect Competition, if the price rises, their rises. (fill in with the term quantity supplied or supply) 13) If the marginal cost decreases for a firm in Perfect Competition, then more units will be worth producing at any price. This means that a marginal cost decrease leads to a increase. (fill in with the term quantity supplied or supply) 14) If the number ofrms increases in Perfect Competition, then more units will be produced in the whole market at any price. This means that an increase in the number of rms leads to a increase in the whole market. (fill in with the term quantity supplied or supply)